how to sell your house with a tax lien

Can You Sell a House With a Lien on it in California?

Can you sell a house with a lien on it in California?

Yes, it’s a more complicated process, but it can be done in certain situations. The path forward is challenging, but you may have options.

If you’re ready to sell, working closely with a Southern California real estate investor can make quick work of the process, and if your home qualifies, you can put this challenging matter behind you and walk away from the streamlined sale with cash in hand.

So what does a lien on a house mean for you under circumstances when you are trying to sell? Let’s dive in and find out!

Disclaimer: The information provided in this article is for educational purposes only and should not be construed as legal advice. We are not experts in legal matters, and readers are encouraged to seek the proper professional legal counsel for specific guidance.

Key takeaways

When it comes to selling a house with a lien, there are several key points to keep in mind, including:

  • If there is a lien on your property, selling it will be more complicated than using traditional methods, but it may be possible.
  • While the simplest approach is resolving the lien prior to sale, this requires considerable financial resources.
  • If your property is especially well located, a real estate developer or another buyer may be interested in taking on the lien with purchase, but this is the exception rather than the rule. 
  • The best option if you’re ready to sell is working with a real estate investor who will guide you smoothly through the steps necessary to determine if your home with a lien attached qualifies for sale and, if it does, will expedite the process.

What does a lien on a house mean?

A lien on a house is a legal claim or right against the property by a creditor due to unpaid debts or obligations, securing the debt and giving the lienholder the right to a portion of the proceeds if the property is sold. There are various types of liens, such as mortgage, tax, mechanic’s, and judgment liens, each representing different debts.

Selling a house with a lien can complicate the transaction, as the lien must be resolved before or during the sale, often requiring payment of the debt to clear the title. Obtaining title insurance can be difficult with outstanding liens, as it ensures the buyer that the property is free of legal encumbrances.

Liens have a priority order, with mortgage liens usually having the highest priority, followed by tax liens and others. In some cases, liens can be negotiated or settled for less than the full amount owed, particularly if the property is being sold under financial distress or foreclosure. Understanding the implications of a lien is crucial for ensuring a smooth and legally compliant transaction.

Can you sell a house with a lien on it?

Yes, it is possible to sell your house if it has a lien on it, but the process involves specific and often-complicated steps. A primary concern is obtaining title insurance, which can be affected by the type of lien in place.

From our extensive experience of 16 years, we have found that addressing liens early in the selling process can significantly streamline the transaction. For instance, resolving outstanding debts or negotiating with lienholders before listing the property can help avoid delays and complications.

If you intend to sell, partnering with a real estate investor who pays cash for homes can provide valuable guidance through the intricate process of determining whether selling your home with a lien is feasible.

Data indicates that homes sold to investors in such situations close 30% faster than traditional sales, enabling you to resolve the lien and move forward expeditiously.

Should your home qualify, we are prepared to make a cash offer, ensuring a seamless and efficient transaction.

So, how and when can a house be sold with a lien on it?

So, when and how can you sell property with a lien on it?

As we said, in certain situations, you can sell your house even if there’s a lien on it, but guidance is advised. There is a specific process involved with selling a home with a lien attached, and some of the best companies that buy houses for cash can help.

At Socal, we think we are one of these companies, so please reach out with any questions and we’ll do our best to help you out, but let’s take a look at your options.

Sell to a real estate developer

Occasionally, real estate developers are willing to pay for homes with liens on them in an effort to speed up the process. This is typically a matter of satisfying a specific need, such as where the property is located.

Pay off the lien prior to listing

If you’re able to pay off the lien placed on your property before you list it, it’s the simplest approach, but it’s not always financially feasible. If you do go this route, it’s important to obtain a copy of your release of lien letter from the lien holder as soon as your payment clears. This allows you to show any potential buyers that there is no legal claim against your title.

Pay off the lien with your sale proceeds

If you have enough home equity, you can use the proceeds from the sale of your home to release the lien. When it comes to how to remove a lien on property, this is a good option for anyone who’s accumulated some equity in their home over the years but doesn’t have the resources to pay off the debt associated with the lien.  

Negotiate a payment plan

If taking care of the lien prior to or during the sale of your home isn’t a possibility, you can contact the lienholder directly, and they may be interested in negotiating a settlement – or payment – plan. This can lead to the holder granting release of the lien based on the payment plan, which puts you in a better position to sell.

Dispute the lien in question

If you believe the lien against your home is not legally valid, you can address the matter with the court in an attempt to have it dismissed. The lienholder involved will be tasked with proving the lien’s legitimacy, which is called perfecting the lien.

If you’re successful, such as if the 10-year statute of limitations that applies to liens has run its course, the lien on your house will be resolved. You can begin the dispute process by contacting either the title company or a real estate attorney.

Work with a local real estate investor

If you’re asking yourself “what is the best way I can sell my house for cash in California quickly”, SoCal Home Buyers is on your side. If you’re ready to sell but aren’t sure how to begin, we offer a streamlined process that will analyze your unique situation – determining if you’re in a position to sell and, if so, determining your best steps forward.

We specialize in complicated home purchases like yours, and while traditional sales follow strict timelines, we can offer far more flexibility, allowing us to wait-out time-consuming complications that often stall sales involving property liens. We can even delay the transaction until you’re able to sell. 

We’re well prepared to assess the circumstances surrounding your home lien, and if we’re able to buy your property, we will streamline the sale process, assess the value of your home, and make you a fair cash offer.

If you’re prepared to sell and want to learn more about selling a house as is in California, SoCal Home Buyers invites you to reach out for more information about what we can do to simplify the process for you. Working with the right buyer can make all the difference when it comes to a matter as complex as selling a house that has a lien on it.

Steps to take before selling a house with a lien

If you’re unable to clear a lien before selling your home, you may be able to proceed with a sale. Your buyer, however, must be willing to pay off the lien at closing. Otherwise, the lien must be resolved with the proceeds of the sale before you see a return.

While most buyers shy away from purchases with liens on them, cash buyers are more likely to have the necessary flexibility to work with property owners whose homes are leveraged with outstanding debt in the form of liens.

We at SoCal Home Buyers have an impressive track record of helping homeowners who are ready to sell properties with liens attached, follow the complex steps forward. 

1. Determine if there’s a lien against your property

The first step in the process is verifying that there is a lien against your property. The fact is, that it’s possible to face a lien without even realizing it. A prime example is when a creditor files a lien without notifying the homeowner.

How to find a lien on a property? The information is a matter of public record, and you can access it through the county where the property is located. If there is a valid lien against your property, It’s important to know that it doesn’t necessarily halt your ability to sell.

2. Determine the type of lien you’re facing

There are several types of liens in California, but most operate as legal claims against the property they’re attached to, and they can be enforced if the debt is not paid. Who can put a lien on a property? Consider the following prime examples of who can obtain an involuntary lien – or a lien that is sought in response to debts that go unpaid – in California:

  • An IRS tax lien can be placed on a home if the owner fails to pay property tax, which can take precedence over the mortgage itself. 
  • A property tax lien is similar to an IRS tax lien but addresses property taxes levied by the county. 
  • A judgment lien is issued by court order and generally relates to a debt that’s based on child support or alimony.
  • An HOA lien can apply when the homeowners association dues or fees go unpaid.
  • A mechanic’s lien, which is also called a construction lien, applies to unpaid charges for work performed on a property.

A mortgage lien that allows your mortgage provider to take possession of your home if you fail to make your mortgage payments is a voluntary lien, which won’t adversely affect the sale of your home.

3. Validate the lien before disputing it or reaching a settlement

In some instances, liens are not legitimate to begin with, and you can have the matter resolved through the legal system. If the lien is legitimate, however, you can attempt to negotiate a resolution with the lienholder.

4. Pay the lien and clear the title

If you have the financial ability to do so, paying the lien and clearing it with the title company is the easiest way to handle the issue prior to sale. 

5. Consider your options

If your home is in a particularly inviting location, a real estate developer may be interested in purchasing it with the lien attached.

6. Consult with a Southern California real estate investor

Real estate investors pay cash for homes as they stand, including homes with liens attached. If you’re ready to sell, an investor can help evaluate your prospects and skillfully guide you through the sales process if selling is an option for you. 

Can I sell my house with a lien on it to you?

Can you sell a property with a lien on it to us?

Yes, we’re ready to discuss purchasing your home from you. At SoCal Home Buyers, we purchase homes throughout Southern California, and we have the financial flexibility and expertise to consider homes that come with liens.

We will effectively and efficiently guide you through the process, and if we’re able to make you an offer, the cash transaction will be faster than you expect. 

Can you transfer property with a lien?

Yes, you can transfer property with a lien, but the lien remains attached to the property. The new owner assumes responsibility for the lien, and it must be resolved before they can obtain clear title. It’s generally advisable to settle the lien before transferring the property to avoid complications.

Can you sell a house with a lien on it?

Yes, you can sell a house with a lien on it. However, the lien must be resolved during the closing process. The proceeds from the sale are typically used to pay off the lien, ensuring the buyer receives a clear title.

Here’s how easy selling property with a lien is:

  1. Contact us at 951-331-3844 or fill out the short form below to request your fair cash offer. Note: If you’re dealing with liens on your property, don’t worry. We have experience handling such situations, and we’ll do our best to find a solution.
  2. Await our prompt response to discuss your property and the liens in greater detail and schedule a one-time inspection. Note: Dealing with liens requires a comprehensive understanding of the situation, and our team will work closely with you to assess the property’s condition and lien status.
  3. Our in-house inspector will assess your property and liens to determine a fair cash offer based on the market value and the lien amounts. Note: The presence of liens may impact the final cash offer, but we’ll strive to provide you with the best possible solution to resolve the liens and purchase your property.
  4. If you’re on board with the offer, we’ll work diligently to address the liens and facilitate the sale process. Note: Resolving liens can involve negotiations and legal procedures, which may extend the timeline. We’ll work with you to find the most suitable closing date.

Throughout the process of selling your house with liens, we’ll handle the complexities and work towards resolving the liens to ensure a smooth transaction. While liens can add intricacies to the selling process, our experienced team is here to guide you through the steps and find a solution that works best for you.

Reach out to us today to discuss your situation further and learn how we can help you sell your California house with liens.

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FAQs

What is a lien sale on a house?

A lien sale on a house refers to selling a home that has a lien on it. Some buyers are interested in taking on the lien as a means of expediting the sale. Real estate investors buy qualifying homes and, in so doing, simplify the process considerably.

Can you sell land with a lien on it?

Yes, you can sell land with a lien on it, but you’ll need to take steps to ensure that you proceed in accordance with the law. The path forward is challenging, but a real estate investor who pays cash for qualifying properties with liens can help.

What is the most important first step for selling a house with a lien?

One of the most important steps you can take if you’re ready to sell your house with a lien is consulting with a Southern California real estate investor who has the expertise and resources to help determine if your home qualifies and to make a cash offer if it does.

Can someone put a lien on my house without me knowing?

Yes, someone can place a lien on your house without your immediate knowledge, but you will eventually be notified. Liens are recorded with the county recorder’s office, and the lienholder is usually required to notify you formally.

Who can place a lien on your house?

Entities that can place a lien on your house include creditors such as mortgage lenders, the IRS (for unpaid taxes), contractors (mechanic’s liens for unpaid work), child support agencies, and individuals or entities that have won a court judgment against you.

How long does it take to remove a lien from a property?

The time it takes to remove a lien from a property varies depending on the type of lien and the specific circumstances. Generally, once the underlying debt is paid or settled, the lienholder will issue a release, which must be filed with the county recorder’s office. This process can take anywhere from a few days to several weeks, depending on how quickly the lienholder acts and the efficiency of the county recorder’s office.

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