If you fall behind on your mortgage or tax payments, creditors can put a lien on your property. A lien ensures that they get paid first when you sell the property, which can complicate real estate transactions.
Many homeowners ask, “Can you sell a house with a lien on it?” Yes, but you must resolve the lien to transfer the title to the buyer either by paying it or transferring the debt to the new owner. At Home Buyers of Savannah, we buy houses in Rincon with these restrictions and offer advice to help you understand what the lien means and make the process easier.
Different Lien Types and How They Affect Home Sales
Not all liens are created equal. Some, like mortgage liens, are voluntary. These are part of the deal when you take out a mortgage—the bank holds the title until you’ve paid off the loan and can foreclose if you don’t make payments.
Because a mortgage lien is voluntary, you can sell the house and use the proceeds to pay the loan. Involuntary liens, however, indicate that you didn’t pay a bill and guarantee that the creditor will get their money if you sell. They include:
- Tax liens for unpaid property taxes.
- Judgment liens from losing a lawsuit.
- Mechanic’s liens for not paying for labor or supplies on property improvements.
Can you still sell a house with a lien on it if it’s not a mortgage or other voluntary lien? Absolutely, but you’ll need to address the debt first.
I Have a Property Lien. Now What?
Although it’s best to try to clear a lien before you sell, if you can’t, you can still list the property with the condition that the buyer takes on the debt. However, most buyers aren’t willing to pay someone else’s bills, and many mortgage companies require a clear title before closing on a loan.
You may be able to negotiate a lower settlement with the creditor, which you can pay before or at closing. Some lienholders also allow homeowners to sell the property for less than the total amount they owe. However, this is typically a lengthy and complex process not all buyers want to go through with it.
Explore a Cash Sale
If you’re in a tough spot, a cash sale is a viable option, even with a lien on the property. In some cases, this may be the best way to avoid foreclosure. When the bank forecloses, they’ll sell the property to satisfy your debt, but your credit will take a hit. A cash sale can help you pay what you owe and move forward with a fresh start.
Let Home Buyers of Savannah Help
Rincon homeowners call Home Buyers of Savannah all the time, asking, “Can you sell a house with a lien on it?” We’re here to help, so give us a call at (912) 513-8744. We buy houses in any condition, even with a lien, and make the process as smooth as possible.
