April 30, 2018
When it comes to real estate transactions, property liens can be fairly common culprits responsible for slowing down the process. So what do Westland sellers need to know about property liens?
Understanding Property Liens
Essentially, a property lien is a legal notice that’s put on file as a consequence of an unpaid debt. In most instances, a lien results from either unpaid taxes, unpaid bills or a judgement that was made in court. Creditors can choose to take this course of legal action in order to show that they are serious.
While this can feel like a huge deal, there is no need to panic. Many buyers and sellers do not realize that property liens are actually fairly prevalent. Westland selles just need to know how they can resolve so they can complete a home sale.
Various Kinds of Property Liens
Creditors may place various kinds of liens on your Westland home. Typically, the most common liens are: tax liens, judgement liens, and mechanic’s liens.
A tax lien is pretty straightforward: if you do not pay your taxes – be it federal, state, or county – the government may file a tax lien on your Westland home.
Meanwhile, a judgement lien is often the result of a judgement against you in a court case. The winning party in the lawsuit can file a judgement lien against your home until the payment is collected. However, not paying a bill for legal services rendered can also result in an attorney filing a lien as well.
Lastly, a mechanic’s lien is often used by tradesmen such as plumbers, carpenters, painters, etc. In order to make sure that they are paid for the work they have done, they may file a mechanic’s lien on your home.
How Do Property Liens Impact Westland Home Sellers?
The short answer is that property liens will put a real estate transaction on hold.
When a home is put under contract, the title company that is used for the transaction will search for any outstanding liens that have been filed against the Westland property. Once the mortgage company becomes aware of the situation, they will not agree to finance the purchase until the lien is paid off. This responsibility falls on the Westland home sellers.
Usually this will motivate the Westland home sellers to take action, but there are situations where a seller either wants to contest the lien or flat out refuses to pay. When this happens, the sale is put on hold until a definitive resolution is reached.
Buyers dealing with a situation like this have two options: either walk away without losing any earnest money or accept responsibility for the liens. When dealing with a cash purchases, buyers and sellers can come to their own resolution.
What if My Westland House has a Lien?
Westland home sellers who discover their home has a lien will first want to check and verify that the lien actually belongs to them. As these holds are searched by name, it can happen that family members with similar names might actually be the responsible party, not you. In situations like this, Westland home sellers will want to work with the title company to ascertain exactly what proof is necessary for clearing the house.
But if you find the lien is actually correctly attributed to your property, Westland home sellers need to start resolving as soon as possible. This means reaching out to the lien holder in order to arrange a payment situation. In most cases, this is settled by agreeing to paying out what is owed from the sale’s proceeds. However, there may be some situations that are more complicated and could require the advice of legal counsel.