Almost every home sold in the United States has some type of lien on it, and quick cash home buyers can help you resolve nearly any kind of lien problem. However, some liens can pose a greater challenge than others, so it is important to understand the three different types of liens and how they can affect your homeownership.
Here is a brief explanation of the three different types of liens that can be placed on your home.
A statutory lien is a lien that is created by government or authorized governmental agencies that are not voluntary. These are typically real estate taxes, school district taxes, city taxes, and municipal taxes. These liens are automatically placed against the home and cannot be avoided. These types of liens are almost always superior to all other claims, and in the event of a sale, foreclosure, seizure, or other transfer, they must be paid before any other claims. Simply put, the government always gets paid and is first in line when it is time to collect. When selling your home, even if it is for all-cash, the taxes will be paid current as of the date closing, and if not currently due, they will be prorated through the date of closing. These types of liens will not delay the closing or stop you from selling your home.
A consensual lien is any lien that the homeowner voluntarily allows to be placed on their home. This includes a mortgage, home equity loan, home improvement loan, voluntary mechanics liens, and any other lien that the homeowner allows to be placed on the property. In Texas, the most common voluntary lien is a mortgage that is called a “Deed of Trust.” These loans are considered consensual because you are not required to accept the loan but do so in return for the benefit it provides, such as the ability to buy the home or make the desired improvement. These liens can generally be removed by paying off the amount owed, but in some situations, they may have prepayment penalties or other restrictions. These types of liens will not delay the closing or stop you from selling your home.
An involuntary lien is a lien placed against the property without the consent or approval of the homeowner. The most common of these are mechanics liens filed by a contractor who performed work or provided material to repair or improve the home, and the contractor is claiming that the homeowner did not pay them as agreed. Many times these liens are filed when there is a dispute between the contractor and homeowner. The contractor files a lien to protect their interest, but many times, they use it to intimidate the homeowner. If you find yourself in this situation, the first thing you should do is to try to negotiate a settlement that is fair to both parties. There are many rules and regulations concerning mechanics liens, and a contractor has rarely followed all of the required regulations, so voiding a lien on a technicality is possible.
Also, many of these liens expire and become void if not enforced within one year from the date of recording, so you may want just to wait it out. If the contractor is uncooperative or unresponsive, these types of liens have the potential to delay the closing. Still, experienced quick cash home buyers will know how to help you resolve these types of claims quickly.
Federal and state unpaid tax liens are involuntary liens that have some very unique features. First, they do not expire in one year and in if not managed correctly, can be superior to a mortgage or other loan or lien. Unlike a mechanics lien, these liens typically stay on the property for ten years from the date they are recorded and can be renewed for an additional ten year period since these types of claims can be superior to other liens they must be removed or paid at closing. There are a lot of rules and regulations concerning tax liens, so you must sell to an experienced quick cash home buyer who will be able to help resolve these types of claims with minimal delays.
In summary, some liens can be an issue, but a lien will rarely prevent a quick cash home buyer from buying your home. A fast cash home buyer can be a great source of help in resolving the lien and getting you the cash you need quickly and with the least amount of hassle.
Can I Sell My House for Quick Cash if it has a Lien on it? | OutFactors — Dallas, Texas