When you go to buy land the title search may reveal existing liens against it. This can clog up the gears on your sale. A lien is a legal notice of an unpaid debt. Suppose you feel that the claim details are incorrect or that the creditor filed the lien against your land in error. In that case, an attorney can assist you in researching the lien history and help you negotiate for final payment if the debt is valid, and if not valid, have the lien removed.
These liens also have different priority levels against the debt, and when the land sells, the order of the highest priority lien determines the order of payment. Most of the time the date the lien is filed determines repayment priority. Understanding which type of lien is on your land can makes taking care of the lien a bit less overwhelming. Read on to explore liens, what’s on our selling land blog, and how to sell a house with liens.
What Are Consensual Liens
There are two general types of consensual voluntary liens also known as voluntary lien. The mortgage lender can take possession of the property with either kind of lien, known as foreclosure, and ends with the land in an auction to sell it. The first lien is a purchase-money security interest lien, such as a mortgage wherein the asset used to buy the home is the collateral for the loan. The other type of consensual lien is the non-purchase-money security interest, such as a second mortgage, where the debtor utilizes the property as security for a loan. Go here: selling home blog and selling house blog to learn more about these types of liens.
What Are Non-Consensual Liens
Enacted by operation of state or federal law or statute, statutory liens are non-consensual or involuntary and are generally tax-related, giving the creditor secured interest on the land. The creditor may go after the secured interest and have the land sold. Liens that result from court judgements from lawsuits or from an individual or company filing a claim are known as judgment liens. Ultimately, if the borrower fails to fulfill the loan terms, this type of lien allows the creditor to take the property’s title and sell the land to recoup their money.
Creditors who seek repayment of their loans file the lien against a house and receive a payment if the house sells or, in some cases, a creditor can seize the house with liens on it to recover the debt. If you cannot repay the debt, you may find you’d be better positioned financially in the future by taking steps now to protect yourself.
Pay Off The Liens
You could sell a house before further action by a creditor and thereby arrange to pay off or resolve the debt on your terms. Because existing liens can complicate the process, it’s beneficial to work with a professional experienced with these things, like professional buyers. When you pay off the debt, you will need to obtain a release-of-lien form from the lender, local attorney, or local government. This form will need to be notarized and recorded in the land records department in your County. Be aware that there may be filing fees associated with this process, which makes the release of the lien public information. If you’re paying off a federal tax lien, when paid in full, the IRS will provide you with the release form which you will send to the county to remove the lien.
Sell Directly to Investment Company
If you find yourself short on money, time, and the patience necessary to deal with the hassles of listing and showings, contact a professional investment company. These professional investors have helped other homeowners just like you overcome the hurdles that liens can throw at you. They will be happy to answer any questions you have about a direct sale and help ease your mind of any concerns. A direct sale to one of these investment company’s is generally a quick process. Your closing could be in a matter of days or a bit delayed if you need just a little more time to move. Theses professional investors don’t charge commissions, and there are no hidden fees in our straightforward contracts. You won’t even pay closing costs. Many of these companies will lay out the numbers side by side so you will know what the property would sell for through listing and all of the costs you would face by selling on your own. Then, they will make you an offer to buy your house allowing you to understand the numbers for yourself to see the offer is fair. Save time, save money and make the process easy on yourself by working with these companies to sell a house with liens and walk away from the closing with cash in your hand.