The presence of property liens can impact the sale of your home. Often sellers are not even aware they have a lien on their home, and the delay caused by having them removed can cause a qualified buyer to look elsewhere.
Along with other pre-listing tasks such as repairs and curb appeal projects, sellers should order a title search to determine if any liens are on the property. Some liens are expected, such as the mortgage lien that ensures any home loan is paid off at the time of close, but others might come as a surprise. Here are a few liens that can derail your closing.
Mechanics Lien A contractor may place a mechanics lien on your home to make sure they are paid after a home project.
Divorce Lien Even if you and your spouse have agreed on the sale of the home, the court may need to approve the sale before the lien can be removed.
HOA Lien Past due Homeowners Association payments and assessments can lead to a lien on the home.
IRS or Tax Lien A government’s legal claim against your property when you fail to pay a tax debt can stall your sale.
Judgment Liens A court may rule that a creditor has the right to take possession of a debtor’s real or personal property if the debtor fails to fulfill his or her contractual obligations.
Credit Card Liens If you default on a credit card and the issuers get a judgment, they can attach a lien to your property.
Liens must be dealt with before a home can change title. Sometimes the lien holder will negotiate the amount due while others will want full payment before releasing the lien. Either way, dealing with liens can take time and money. It’s always best to remove liens before listing your home for sale.
The ability to attach liens can vary by state. Always rely on a trusted professional to guide you.