Mr. Goodwin is everything you want in an attorney: professional, honest, thorough, and genuinely caring. He always explains things clearly, so I understood exactly what was happening and what to expect next. His attention to detail and persistence really stood out. Looking back, I feel lucky to have found him. He guided me through the whole process expertly, and I deeply appreciate all his hard work. Would definitely recommend him to anyone needing legal help.
Buying or selling a home is complicated enough without having to worry about liens. If you want to sell your house but have a lien, you may be wondering if it’s possible to sell before the lien is fully paid. The short answer is yes, you can sell a house with a lien, but the process is more complex. In most cases, you’d have to pay off the lien in order to sell the house.
A lien is a legal claim or interest that a creditor has on a property until an outstanding debt or obligation is satisfied. Some common examples include mortgage liens, tax liens and mechanics’ liens.
The lien attaches to the property’s title, which can discourage prospective buyers from purchasing the property.
As part of the closing process, you must disclose the lien upfront to any potential buyers. Even if you will not, the buyers will find out from a title report.
When selling a house with a lien, there are typically three options, which are to pay off the lien, have the buyer assume the lien, or remove the lien.
Pay Off the Lien
You can pay off the lien before listing the house on the market. This makes the home more attractive to buyers. You or your attorney can contact the lienholder and negotiate a settlement to pay a lesser amount to release the lien. This can save substantially on paying the lien in full.
If you are unable to pay off the lien before listing the property, you would have to pay off the lien from the sales proceeds. You would need a representative from the lienholder to release the lien at the closing. The lien must get paid off first as part of the sale using the sales proceeds.
Have the Buyer Assume the Lien
The buyer can assume the lien, probably for a sufficient discount off the purchase price. You can have an attorney draft an indemnification agreement, requiring the buyer to take responsibility for the lien, releasing you as the seller from liability.
To compensate the buyer for taking on the property with the lien, the seller may need to lower the asking price or offer closing cost concessions. These factors may make it more difficult for the seller to find a willing buyer. Having a lien on a property creates an unwanted complication in most real estate transactions.
Remove the Lien
If you believe that the lien is not valid, you can contact an attorney to help you in removing the lien. If the lien has been paid in full, you may need to contact the lienholder or an attorney to get it removed. If the lien is due to a notice of pendency, you can contact an attorney.
Most liens are valid and there is nothing you can do about them. But if there are grounds to dispute the legitimacy of the lien, we can file for a court hearing and seek to have the lien invalidated.
If the lien is due to unpaid property taxes, we can file an appeal that may result in lowered taxes and which can reduce or eliminate the lien amount.
If the lien is with the Department of Social Services for Medicaid, you can try to ask for the DSS to remove the lien due to hardship.
The downside of suing the lien holder is that it can take years, and you are not guaranteed to win. So if you are looking to sell the house fast, filing a lawsuit might not be the best option.
Trying to sell real estate with an outstanding lien is more complicated than a regular property. With the right legal guidance, the lien can be properly handled so it doesn’t derail a sale. If you’re looking to sell a home with a lien on the title, you need an attorney like us who can help you navigate this process and cancel the lien. Should you need legal representation, we at the Law Offices of Albert Goodwin are here for you. We are located in Manhattan, in New York City. You can call us at 212-233-1233 or send us an email at [email protected].
About the Author
Albert Goodwin Esq. is a licenced New York attorney with over 17 years of courtroom experience. His extensive knowledge and expertise make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
