For most homeowners, preparing to sell their home means making repairs and looking for a new home. For some homeowners, it could mean having to settle a lien. If you have a lien against your home, here is what you need to know about its impact on your ability to sell your home.
What Is a Lien?
A lien can put the sale of your home on hold. The lien is placed on your home when you have an unpaid debt. The debt could be from a contractor, a state or federal tax agency, or a court judgment.
For instance, if you had repairs on your home and did not pay the contractor what he or she was owed for the work, the contractor can place a lien on your home. The lien will not be removed until the debt is paid or you work out an agreement with the contractor.
If you are planning to sell your home, the lien will have to be dealt with or the sale could be indefinitely delayed.
What Can You Do?
There are some available options for handling the lien. The most obvious is to simply pay off the debt that you owe. If there is some dispute about the debt, you need to resolve that with the other party before the buyer can take ownership of the home.
Another option is to let the debt ride until closing and deduct the amount owed from the price that is paid for the home. For instance, if you are selling your home for $150,000 and the lien is for $50,000, the amount owed would be deducted from the funds you receive and paid to the creditor. You would receive the remaining $100,000.
There is a long shot option that you might be able to use to settle the lien. You could ask the buyer to pay it. If the buyers are anxious to buy your home and the debt is reasonable, you might be able to convince them. However, it is likely that you will have to resort to a different method. The buyer would likely take his or her earnest money and walk away from the deal.
If you are concerned about how a lien would impact your ability to sell your home, talk to your realtor. He or she can help you explore your options and recommend the best option for getting rid of the lien
Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.