Can you Sell a House with a Lien on it?

A lien is a claim or legal right against assets that are typically used as collateral to satisfy a debt. A lien could be established by a creditor or a legal judgement. A lien serves to guarantee an underlying obligation, such as the repayment of a loan. If the underlying obligation is not satisfied, the creditor may be able to seize the asset that is the subject of the lien. There are many types of liens that are used to secure assets

A judgment lien is a court ruling that gives a creditor the right to take possession of a debtor’s real or personal property if the debtor fails to fulfill his or her contractual obligations.

A lien can be voluntarily placed on any asset by anyone. A lien is typically taken out to ensure that the lien holder either receives payment for services rendered or repayment of a debt owed. Let’s go over some of the most common lien holders:

1) Mortgage lenders – If you have a mortgage, the lender most likely has a lien against your house (or even multiple liens); most banks require borrowers to secure their loans with collateral like real estate.

2) Contractors – If someone has worked on repairing or building additions onto your home then they can place a lien against it.

3) Government lien – These liens are typically placed by government entities to preserve property until taxes or other fees are paid. For example, a lien may be placed on property to ensure payment of property taxes or utility bills. Property tax lien holders have first priority over all other lien claimants when it comes time to sell the house.

Short answer is Yes. Selling a home with lien is not the ideal way to sell it, but it can be done. Depending on the Lien you may need to hire an attorney and work with lien holder in order for this process go smoothly. The lien holder will likely want you to pay your lien off(if not paid already) which is completely understandable.

Selling a house while there are lien against it is possible; however, you will have fewer options of who to sell your house too. For example; if you owe taxes on your property then the government lien holders (government entity that placed lien on your house) will get first priority above all other liens against your home like mortgage lien or construction loans. If the amount of these Liens are bigger than what you house is worth you may need to bring cash to the closing table in order to sell your house, this is when it gets complicated and may become really expensive.

The most obvious choice is to figure out how much lien you owe and pay it off. After lien is paid the lien holder must then release lien on your house, this process can take time (weeks) to months depending on lien holder (most of the time it’s the bank). However this option could be expensive if your debt isn’t small enough to pay off fast enough. 

This is something you definitely will need to take care of before you even think about listing your property. You have to make sure the Lien is not longer attached to the property, and then you will be able to list it and wait until you get the right offer.

If this options is too expensive and time consuming for you, then we have a couple more options for you, so keep reading.

This option is similar to the first one, but instead of paying your lien holder directly you are going to keep the monies from selling your home and use it towards lien payment. This can be difficult if lien is big enough that you don’t have enough equity in your house to pay off lien at closing. However, if lien is small enough that you have some equity then this might be a good choice for you.

If none of the above options work for you, then we might be able to help. You can avoid all these headaches entirely by doing things right from the beginning. At Go To House Buyer we buy houses with lien in all states. This is usually the best alternative when lien amount can’t be paid off fast enough.