Selling your house even under ideal conditions can already be a tough and challenging process. Dealing with a house that currently has a lien attached to it adds a whole other layer of concerns and problems you’ll have to handle. It’s hard enough when you’re aware of the lien but what really makes things tough is when you weren’t even aware it was there until someone does a property search on your title, which can happen. All of a sudden, you’ve got a big problem you need to fix if you want to sell on the open market in Texas. Finding out you have a lien out of nowhere can be quite the shock, but it doesn’t mean that you’re out of options when it comes to selling your Texas house, especially if you want to sell it to a cash buyer. Let’s run through what a lien is and whether or not you can sell your house with a lien. Let’s find out what a lien is and whether or not you can sell a house with a lien on it in Texas.
How to Sell a House With a Lien in Texas
What is a Lien?
A lien is a legal claim made by a company, organization, or person against a property based on an unpaid debt owed by the owner of that property. A lien allows a person or organization to take property or take legal action against the owner in order to satisfy any outstanding debts. Liens are usually found in the public records so other potential creditors can see them, which can affect whether or not they will provide loans to that person or entity.
One of the most important things to know is that liens are attached to the house or property. So if the transfer of ownership happens, that lien goes with it and becomes the new owner’s responsibility. This is what can make selling a house with a lien on it difficult because few buyers on the open market want to take on a house that comes with a debt they didn’t occur themselves.
What Kind of Lienholders Are There?
Some people are under the misconception that liens only come from governments or companies. However, liens can also be assessed in a variety of ways. If the homeowner hasn’t been paying child or spousal support, a court can put a property lien on the house. You could also have a lien put on your property over unpaid credit card bills or medical debts.
Liens can come from two specific directions, both of which give a person, company, or organization a legal right to your property. They can also be brought about by legal action based on outstanding debts.
If you agreed to have a contractor perform work on your house or property, they expect to be paid for the work they do. If you refuse to pay or simply don’t pay, they can place what’s known as a materialman or mechanic’s lien on your property. Not only can the contractor do this, but a subcontractor who was not paid by the contractor can also come after you with liens in order to get paid. It can sometimes be easy to pay this, but you can also negotiate the lien payment into the sale price of the house.
If a creditor or organization wins a lawsuit against you, they will try to collect payment from you. As part of that, they could file a lien against any property that you own. This is known as a judgment lien. By doing this, they’ll be able to get paid even if you don’t want to pay them.
Your homeowners’ association (HOA) can file a lien against your property over any kind of unpaid fees or broken rules that require financial restitution. Perhaps you cut down trees you weren’t allowed to or you make major changes to the structure of the house that will alter its value moving forward. HOAs can be especially strict and persnickety when it comes to following their rules, so it’s not uncommon to hear about an HOA lien being enforced. Whatever violation of HOA rules, it could be enough to satisfy a lien. Make sure you read your HOA manual when you decide to live within one.
If you don’t pay state taxes, the Texas Department of Revenue could put a lien on your property known as a department of revenue lien. You can often work with them to make payments instead of the lien and perhaps move it entirely to a different property. However, you’ll want to make sure you’re working with a tax attorney or CPA on the matter as this can get very tricky and you don’t want to bother the department of revenue further.
Just like with state taxes, not paying your federal taxes can result in a lien as well. The Internal Revenue Service (IRS) can put an IRS lien on your property for failure to pay federal taxes. Of all the liens, this might be the one you want to avoid the most as it can be very difficult to deal with. You will absolutely need to involve legal and accounting experts to help you figure out how to pay off the debt and get the lien removed before selling. Attention from the IRS is not something you want to exacerbate.
Try to Get Rid of the Lien If You Can
While it is possible to sell a house in Texas on the open market with a lien on it, if you can possibly get rid of the lien before selling, that would be ideal. The chances that an open market buyer is going to want to take over a house with a lien on it are very tiny. If you can afford to pay it off, it’s in your best interest negotiate with the lienholder on a solution that works. If you can’t, see if they’ll let you pay a percentage of the lien in order to get it removed, which some lienholders will agree to. You’ll probably still be responsible for the debt, but at least you won’t have the lien to worry about anymore.
Sell Your House As-Is
As you can see, liens create a real headache for anyone trying to sell a house in Texas with one attached. They act as a real deterrent for buyers on the open market and create questions and concerns you’d rather not have to deal with. It also could lead to some uncomfortable negotiations and conditions put on the potential sale that will cut into your profits and even cause the buyer to walk away.
That’s why it might make more sense to sell your house as-is to a real estate investor like Very Fast Home Buyers. We will buy your Texas house with a lien attached and we will buy it in its current condition no matter what. Whether you’re dealing with liens, property damage, water damage, foreclosure, unruly tenants, or any other kind of problem that makes it hard to sell a house on the open market, we will buy your house.
The process is simple. All you need to do is contact us and let us know you’d like to sell your house. We will reach out to you as soon as possible with questions or to potentially set up a tour. Then, we will make you a fair cash offer based on the current condition of the house. No lowball offers! If you accept, you can close on the sale whenever you want. Then you’ll get cash in your pocket and we will handle the house and any liens attached. No more worrying about the lien and you get to have a fresh start with a new house without financial issues.