If you're a homeowner looking to sell a house with a lien — a legal claim on your property for nonpayment — it may be difficult to get potential buyers to bite. However, cash buyers like Florida Cash Home Buyers may be an efficient and effective solution that saves you the hassle of trying to clear the lien or having to deal with a real estate attorney.
While it is possible to sell a home with a lien, you'll need to find a buyer who agrees to assume it or pay it off. If you can't do that, you'll need to clear the lien by paying it off in full before selling your home.
Property liens fall into two categories — voluntary and involuntary.
- Voluntary liens are liens consenting because the seller agreed to them — the most common type is a mortgage.
- Involuntary liens, on the other hand, are placed on your property if you haven't paid creditors — for example, a tax lien or code enforcement lien. Involuntary liens can make selling your personal property more difficult because they often indicate you're in financial distress or have unresolved or ongoing disputes. However, it is still possible to sell a house with a tax lien on it.
If the lien is big enough to potentially cause problems for a buyer who wants to purchase your home, you might not be able to sell it through a cash pay-out lien nearly and continue while your property is brought up to code. Depending on your city, you may be able to pay off the lien through a lien forgiveness or reduction program, as long as you resolve the issue that caused the violation in the first place.
However, if you don't have enough money or expertise to clear the lien yourself, we can help. If you're ready to sell your Florida home but it has a lien, fill out our online form or call us at (954) 519-7980 today to see if we can help.
How to Sell Your Home with a Lien
Selling your home with a lien on it might be tricky, but it's definitely possible. It essentially boils down to two main options: the traditional route, which could be more difficult and time-consuming since you need a lien release prior to selling; in most cases or going through a buyer like Florida Cash Home Buyers for a quick sale.
Under Florida law, a lien is an encumbrance against your property's title, meaning you owe someone and they now have a legal claim for payment against your property. The cash buyer option allows you to avoid a lot of the steps in the traditional process and may not require you to remove the lien on your home.
But if you want to sell your home with a lien in the traditional way, whether you use a real estate agent or do for-sale-by-owner, you have to deal with the lien first. These options explain how to manage liens in your home-selling process:
Ways to Sell Your Home
WITH A LIEN ON IT
Wait it out
Clear the lien by paying off the lien in full — this approach may take 30 days to clear after the record of lien is paid and released.
Pay up
Negotiate a payment plan or lower payment with the lienholder; however, you'd be still responsible for paying off the lien over time until it is paid and released.
Cash buyer
Find a buyer who will clear the lien, such as an investor, or call Florida Cash Home Buyers to see how we can take care of your options.
1. Search for a Lien
Before you can even begin the process of selling your home, you need to figure out if your home has a lien or multiple liens and how much you owe. So, first thing's first: search for liens on your property through the Florida Department of State. You can also conduct a property search on your county's tax collector site to see if taxes on the property have been paid and review records on the county clerk's website or visit in person. If you have a federal tax lien, you may need to contact the IRS.
Even if a lien is past the statute of limitations — meaning the lien may not be enforceable — you'll still need to get it removed from your records. Pay off the lien in full and you should receive documentation of a cleared lien within 60 days.
How to Find and Verify
LIENS ON YOUR HOME
Search for liens through a title search, the county clerk's office, the Florida Department of State website or the IRS's website and determine the type of lien and how much you owe.
Send a written request to the lienholder asking for information about your lien and the lien balance.
2. Request the Lien Balance
Next, request the lien balance from the lienholder. This ensures you have accurate information about the lien and how much you owe.
A traditional buyer is unlikely to adopt the lien, so you'll want to assess if and how you can pay and remove the lien before selling your home. A cash home buyer, on the other hand, may adopt the lien or negotiate a sale even if you have a lien on your home.
3. Determine Next Steps
Now that you know if you have a lien and understand how much you owe, it's time to determine the next steps to sell your home.
Make sure the lien on your home hasn't surpassed the statute of limitations, meaning that the lienholder can't take action to enforce it.
Clear the Lien by Paying Off the Lien in Full
If you can afford to pay off the lien, that'll make the traditional home-selling process easier.
The lender has 60 days to clear the lien record once you've paid. Once you've paid the lien amount and the debt is satisfied, the lender must send satisfaction of the debt within 60 days of receiving the payment in full. This may differ depending on legal proceedings involved in involuntary liens.
Apply for Lien Forgiveness or Negotiate a Payment Plan
If you can't pay the lien in full, contact the lienholder to see if there's a payment plan or reduction program available. For IRS liens, for example, you can apply online for a payment plan. However, the lien isn't satisfied until you've finished the payment plan, so you won't be able to sell your house right away.
If you have a municipality lien, like a code enforcement or utility lien, work with your city to get it resolved. Code violation liens can often be reduced if you resolve the issue and apply for an amnesty program. You can check the criteria for receiving a reduction on your city's website.
Find a Buyer Who Will Clear the Lien
If you can't pay the lien on your house immediately, you may be able to get an investor to assume the lien and pay it off for you. If you're considering selling your house with a lien, talk to us to get a clear sense of your options.
5. Sell Your Home
Once the lien is cleared and you have a clear title or you've found a buyer willing to assume the lien, you can sell your home.
Understanding the Statute of Limitations on a Lien
The statute of limitations is sort of like a time limit — it's the amount of time or timeframe in which the lienholder can pursue legal action against you. Once the statute of limitations runs out, they can no longer collect on your lien once the time runs out. However, lienholders may be able to renew the lien to keep it in effect for longer.
You can check the status of your lien by checking the date of the action against you and the amount of time related to that specific lien type. If the lien has passed the statute of limitations, you may still need to report the lien expiry on your records.
If you have judgment lien, the Florida Department of State can provide you with information about the statute of limitations about how to remove it.
Common Lien Types
A property owner can encounter multiple liens from different sources. We've included some common types of liens below.
They can be categorized into voluntary — one that you agree to and create, like a mortgage — or involuntary — one that's created by law, like a judgment or tax lien.
In general, having a lien on your home limits your ability to sell. You should try to resolve them if you can regardless of if you're selling your house the traditional way or with us.
Common Lien Types
Liens are legal claims placed on property to secure unpaid debts.
Mortgage
When you purchase a house with a mortgage, a voluntary lien is placed on your property to secure the loan. Paying back the mortgage will remove the lien.
Statutory
This legal claim is imposed to secure payment of a debt owed, such as unpaid homeowners association assessment, such as a code enforcement lien or utility lien.
Judgment
This legal claim is placed on a property to allow creditors to secure payment of a debt.
Ready to Sell Your House for Cash?
Real estate is a difficult arena, especially if you know your home isn't the ideal sell. If you need to sell your home fast, Elevate Home Cash Offer can help, even if there's a lien on your property.
We've purchased properties with a variety of problems, from open code violations and city liens, to open or expired permits and homestead tax penalties. While issues like these may be too much for a regular investor or home buyer, we're more than equipped to handle them. Plus, you won't have to deal with a realtor.
Here's how it works:
- Contact us to discuss your property. We'll do a comprehensive assessment, ensuring we give you a fair deal and you get the most out of your home sale. After that, we'll give you our no-obligation offer the same day.
- Receive a written offer. Once you review and sign the written agreement, we start the closing process, which can take about 15 to 30 days.
- Close and receive your funds. Complete the sale with us at either a reputable title company or in your own home. You'll get your cash sale proceeds via wire or certified check on the same or next business day.
So, if you're looking for a low-pressure, no-hassle way to sell your home, call us today and see how we can help.