Properties with liens present unique challenges for all of those involved. Liens are legal notices that are attached to a property’s title. This occurs when a creditor is unable to collect unpaid debts from a homeowner.
Unfortunately, when a home has a lien on it, it can be difficult to sell, and, in some cases, liens on a home are not revealed until late in the home buying process. It can be upsetting to find a home you love and wish to buy, only to discover there is a lien on it.
You can purchase a house even if there is a lien on it, and to determine whether a property has any liens, county land records and deeds will be checked. Any liens found, however, must be cleared up before the sale can proceed.
Buying Properties with Liens
If you are considering purchasing properties with liens that are not tax liens, you may be able to negotiate with the property owner. As a result, it is possible to get the lien, or liens, paid off.
Many buyers also consider negotiating a reduced sale price with the seller to cover the cost of the liens. In this case, the lien can then be paid off after the purchase.
Properties with Liens & Short Sales
Additionally, lienholders are usually willing to settle liens for less than the full amount due and may be able to short sell the property if the lien cannot be cleared. A short sale means that any properties with liens are sold for less than its determined value because of a homeowner’s inability to pay the mortgage amount.
This allows many buyers to purchase homes for much less than market value. With short sales, the home is typically sold as-is and the process is a little more complicated. So, if you consider buying a short-sale home, make sure to hire an attorney to help you and make sure you have the home thoroughly inspected. It is critical when buying a home with a lien that you ensure all your bases are covered and you understand what is happening throughout the entire process.
Moving Forward
Falling in love with that dream home can be frustrating and overwhelming if you discover there is a lien. Many buyers back out of home sales when a lien is found, but you do not necessarily have to. Liens can be cleared, and the sale can be completed, if the buyer makes sure to do their due diligence and research.
Working with a real estate agent will enable you to learn the best way to get rid of liens on a property that you are interested in. It is also essential to make sure that you purchase title insurance to protect you from any other title issues that may arise after you purchase the home.
For further information on properties with liens, get in touch with one of the title and escrow specialists at Plymouth Title Guaranty Corporation.
Please note: The safety of our staff and clients is our highest priority. Effective immediately, Plymouth Title Guaranty Corp. will be taking the following precautions to limit the spread of the COVID-19 virus:
All purchase transactions need to take place at a Plymouth Title Guaranty Corp. closing office.
- If a party to the closing is not feeling well, please contact your closer before the closing so appropriate precautions can be taken.
- We ask visitors to utilize the restroom in our building upon arrival to thoroughly wash their hands before entering our office.
- Only individuals required to sign and/or deliver documents at closings will be allowed in our office. Specifically, closings will be limited to borrower(s), seller(s), agents, and lenders.
- All pens used in the closing will be given to the client after use.
- All closing rooms will be cleaned and disinfected in-between each closing.
- Those picking up checks at our office will be instructed to call our main line and request to speak to a staff member who will plan for delivery to the lobby or parking lot of our office.
- All staff will refrain from shaking hands before or after closings and ask clients to do the same.
Please be advised that our staffing may be impacted during this unprecedented event. While we are committed to continuing to provide outstanding service, we ask for your patience in the face of this pandemic.