Maybe — It Depends on the Type of Lien & the Circumstances Involved. Here’s Why.
Selling a home with a lien may not be ideal, but it’s not necessarily impossible. In fact, it can turn out to be a win-win for all involved parties if the circumstances are right and if buyers and sellers know how to navigate these trickier transactions.
To help you understand the ins and outs of these more complicated home sales in Texas, here’s a 3-minute guide on:
- What House Liens Are & When They Can Arise
- How to Deal with a Lien When Selling a House in Texas
- When to Dispute a House Lien in TX
- What Else You Should Know When Selling a House with a Lien in Texas
If you’re a homebuyer or seller who needs a trusted Realtor® in Texas now, simply contact New Home Gurus of Gurus Realty.
We represent buyers and sellers in various types of home purchases across Texas, and we’re highly skilled at streamlining more complicated deals. We also share our commissions with our clients after closing.
What House Liens Are & When They Can Arise
A house lien is a type of debt claim associated with a property and its owner. Creditors can initiate house liens for various types of unpaid debts, usually doing so only after they’ve tried other debt collection methods first.
These liens can be associated with various types of outstanding debts, including (but not limited to):
- Mortgage loans
- Vehicle repair or maintenance work
- Home repairs, remodels, and/or renovations
- Court judgments, like personal injury awards or child support payments
- Tax obligations, including income taxes, property taxes, and estate taxes
Those types of liens do not, in and of themselves, prohibit the sale of a house.
An “attachment lien” can, however.
What Is an Attachment Lien?
An attachment lien generally bars one or more owners from listing and selling a house. These types of liens are usually invoked in divorce and bankruptcy cases to prevent owners from selling off houses before certain events take place.
- Seller Takeaway: House liens don’t typically come out of nowhere, and they won’t disappear on their own either. If you’ve had a lien placed on a house you own, that lien will remain there until you resolve it.
- Buyer Takeaway: You won’t usually know about the liens on a home until closing when the title search happens. This may come as a surprise, but it doesn’t have to be a dealbreaker. If you build some flexibility into your contract (with contingencies), you could have more options at this point, giving you the chance to call the shots or rethink your next moves.
How to Deal with a Lien When Selling a House in Texas
If the house you want to sell has one or more liens attached to it, here are some prudent steps to take and what you can do at each juncture. Doing at least some of this before a house is under contract could help sellers offload their houses with fewer roadblocks and headaches along the way.
1. Double-check the lien(s).
Verify the types and amount of any liens associated with a given house. A title search should uncover all outstanding liens against a piece of property, and this could confirm which liens remain active against a house.
Keep in mind that not all house liens are 100% accurate or legitimate, so you’ll want to look at the details to see if anything may be incorrect, “off,” or exceedingly old (and possibly beyond the statute of limitations).
2. Attempt to resolve the liens.
Legitimate home liens can typically be resolved in one of the following ways:
- The homeowner pays off the lien in full before selling the house.
- The homeowner works out a “settlement” with the creditor who filed
the lien, paying some lesser, agreed-upon amount to resolve the lien. This could happen before or during the home sale process. - The homeowner pays for the lien with the proceeds of the house sale.
- The buyer pays for the lien, purchasing the home “as is,” with the lien.
Once a lien has been satisfied, it should be “lifted.” If the lien will be paid from the proceeds of the sale, the title company will often be the party responsible for passing the cash from the buyer (or lender) over to the creditor(s) involved.
3. Keep everything.
Retain all contracts, receipts, email exchanges, formal correspondence, and other items related to a lien and the resolution of it. If there’s ever an issue and a lien you’ve already satisfied pops up again in the future, your records could be the definitive evidence needed to resolve the matter.
When to Dispute a House Lien
Some reasons to dispute a house lien in Texas can include:
- Typos: Are there incorrect names and/or the wrong addresses on the lien? These typos can misidentify key components of liens, making typos a solid foundation for raising lien disputes.
- Fraudulent liens: This can happen when house liens are filed for work that was never completed. When acts of fraud are suspected, it can be helpful to speak to law enforcement authorities.
- Liens associated with debts that have already been paid: Fully satisfied liens should be lifted, so they no longer are tied to you or your property. If you’re seeing “old” liens that you’ve already resolved still appear on a title search, raising a dispute could be your best move.
Challenging house liens can take time — and you will likely want to wait to sell your house if this is the route you’ll need to go.
Although that may not be ideal, it may put the lien issue to rest for good, letting the homeowner sell a house without the added complication and work of liens.
What Else You Should Know When Selling or Buying a House with a Lien in Texas
You may need to know a lot more before you decide to list, sell, or buy a home in Texas. You also don’t have to figure it out alone or gamble with your best moves in the process.
Get experienced help navigating these sales and get cash back at closing when you work with a trusted Realtor® at New Home Gurus.
We offer invaluable support with offers, negotiations, contracts, and closing, and we represent home buyers and sellers throughout Texas. Plus, we split our commission with our clients after closing.
Homebuyers and sellers who work with New Home Gurus can get back an average of $4,500 to $12,000 at closing.
How Much Cash Can You Get after Closing?
Call (281) 668-8124 or Contact Us to Find Out Now
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