Selling a house with a lien may present some challenges but it is possible to sell a house with a lien. Becoming more informed about liens in Texas can help you to resolve any liens you may have more effectively. So, let’s dive in to get a better understanding of liens and how they work.
What is a lien?
Very simply, a lien is a legal claim for money owed. It is a legal notice attached to a property requiring a debt be paid to a creditor if the property is sold, refinanced, or foreclosed. The lien ensures that the creditor will be paid either before the property is sold or from the proceed of a sale. If there are several liens on a property, the liens with more seniority will be paid out first.
Who can place a lien and what types of liens exist in Texas?
Anyone who is owed money that involves your property has the right to request a lien. A creditor can file a lien with the county clerk’s office in the county where the property lies.
mortgage lien A mortgage lien takes effect when you sign a promissory note agreeing to pay back the money you borrow from a lender. It is the most superior or senior lien and will be paid first if the property is sold. A lender has the right to claim the property if you fail to make payments in full, and once the loan plus interest is paid off the lien or claim is removed. A reverse mortgage is also a superior lien.
second mortgage lien A second mortgage or home equity loan or line of credit is called a second mortgage because it is the second or junior lien to be paid off after the mortgage -if the house is foreclosed or sold.
HOA or Homeowners’ Association lien An HOA lien can be filed by the homeowners’ association if an owner doesn’t pay their dues or other required fees by the HOA. Also, in some places in Texas a weed cutting lien can be placed if the homeowner doesn’t pay a fine that was issued for not keeping the lawn in good shape.
Property tax lien This lien can be placed on your property if you don’t pay your property taxes.
IRS tax lien – If you don’t pay your taxes the IRS can file a tax lien on your property.
Child Support lien A child support lien can be filed for not paying child support in Texas.
Mechanics lien or construction lien This type of lien can be filed if a construction worker who did some work on your property didn’t get paid for their work or for supplies.
Judgement Lien In a civil case a judge can cause a lien to be placed on a house, condo, business, or land to ensure that the guilty party pays the claims made by a creditor or as part of the restitution. Real estate property can have liens placed on it and can be subject to seizure. However, a “homestead” or an owner’s primary residence cannot be seized in a judgement lien.
Owelty Lien This type of lien allows one person to buy out another person’s equity in the property when a couple is getting a divorce in Texas.
How can I find out if I have any liens on my property or if there are any liens on a house I want to buy?
You can contact the county clerk’s office in the county where the property is located. Some counties have this information on their website. A title company can also check for liens.
What should I do if I have a lien and I want to sell?
If you’re able to pay the debt and have the lien released or cleared before listing and or selling, it might give you more options for selling your property. But if you don’t have the money to pay for the lien it is possible to sell the property and use the money from the sale to pay off the lien. Technically you could sell the property with a lien, but you want to get a title policy and a title policy will not be issued if you have a lien. Therefore, to sell the property on the MLS, the lien would have to be paid at or before closing. In other words, the sales price would have to be enough to cover the lien and pay off the lender. It is possible that you may be able to negotiate a lower payoff with the lender. That is something worth looking into.
Texas Best Homebuyers can help you come up with a plan to resolve any liens you may have and help you sell your property either the traditional route through the MLS or through a direct sale. We will provide you with information on all your options, so you’ll be empowered to make the best decision possible.
What if there is an invalid lien on my house?
You’ll most likely need a real estate attorney to help you file the correct paperwork and complete the process to remove the lien.
What if I have a lien and I want to sell my house fast?
Texas Best Homebuyers can work with you to help you overcome any obstacles to selling your house even if you have a lien. A direct sale to Texas Best Homebuyers can go much more quickly than selling your house on the Multiple Listing Service. But we would be happy to give you an estimate of what your house would sell for on the MLS vs. putting it up for sale by owner vs selling to us directly. We can list your house on the MLS if you prefer. But if you decide to sell to us there are no commissions or hidden fees and no closing costs. If selling your house fast would allow you to be able to move forward to the next chapter of your life right now, then let us know! We are here to be of service, and we’d be happy to discuss your property. Give us a call today 817-808-4911 if you are thinking, “I need to sell my house fast” in North Richland Hills.
*This information is meant to be a general guide and not to provide legal advice. We recommend consulting a real estate agent or real estate attorney for advice specific to your situation.