Do Property Liens Mean a Home Sale Can't Happen? Here's Hope
Sometimes, home buyers may not even know there are liens on their property until they’re uncovered during a title search as the deal moves toward the closing table. Or homeowners may already be aware of the lien, but lack the funds to pay it off.
In either case, all liens must be settled before a home sale can happen.
“If you attempt to put a house up for sale with liens, you are going to run into delays,“ warns Nick Woodward, a real estate agent with Keller Williams in Connecticut.
Do liens mean a property sale can't go through?
In some cases, liens can mean delays that are only hiccups. The sale can still happen, but the lien is going to eat into whatever profits the seller may have hoped to bring in.
Let's say, for example, you’ve agreed to sell your house for $200,000 and still owe $100,000 on your mortgage. Normally, at the closing table you'd pay off your mortgage and be left with $100,000 in profit. However, if a $15,000 lien is also found on your property, that will have to be paid off first, so your profits will be only $85,000 (minus any other closing costs, of course).
Issues can arise, however, if you don’t have enough equity in your home to cover the liens