Selling Your House With Code Violations Or Liens
Let’s talk about your options for selling a house that has either code violations on it or liens!
First off, you DO have options, so that’s a good sign. And secondly, almost every problem has a solution – you just need a little bit of patience, and someone knowledgeable to help you through the situation.
Be aware, that if not handled properly, liens could possibly stop the sale of your home – so take every step you can to make things flow smoothly.
A quick overview of the types of liens that can be put on your property:
- Property Tax Lien
- Mechanics Lien/Construction Lien
- HOA Lien
- Code Enforcement Lien
- Judgement Lien
- IRS Lien
- And more…
A lien acts as a blemish on the title of a property, it is a recorded claim that someone else makes on you or your property that requires monetary compensation before releasing you to be able to sell your house or property. It is a public record that is made against your property for unpaid money.
- Determine the specific liens and judgments that are against the property you are trying to sell.
- Look at some of your options…
Options for dealing with a lien on a property
1. Try negotiating with the creditor who has issued the lien
If you are knowledgeable with liens, or if you know someone who is well-versed and competent in dealing with them, then you can have them approach the creditor to try to get a partial or full release of the lien. This route tries to have the lien reduced, so that it is easier to pay off and has less financial hardship on you – or if it is a full release, you are in luck and are completely released from the lien owed amount.
Often times, creditors would rather receive something rather than nothing at all from you, so they will be willing to receive a reduced amount for the lien to be cleared.
Important note: Some liens CANNOT be negotiated, so you might have to do some research into your specific lien to see if it is possible. Also, while some types of liens can expire, it depends on your state and if the creditors decide to re-file and extend the lien.
2. Pay the lien before selling
If you are able to negotiate the lien amount (or even if you are not able to negotiate it down) and you are indeed able to pay it out fully yourself – pay the lien! Once it is paid, get a letter of satisfaction for the lien and give it to your county clerk to remove the lien from your property.
3. Lien amounts can be paid off using the proceeds from the sale of the property
If you are able to locate a buyer who is willing to buy the property with liens on it, you can use the money that you received from the sale of the property to pay off the liens.
You need enough equity in the home in order to use proceeds from the sale to pay the lien.
4. Find the right buyer
In this scenario, especially if you don’t have enough equity in your home, you can try negotiating with the buyer to see if they are willing to take on the lien and pay if off. Some buyers will be willing to purchase your home and pay off liens – particularly investors.
For some Florida specific information on code enforcement information, check out the following links:
Have you ever bought or sold a property with liens attached to it? How did it go? Have more questions about it? Let us know in the comments below or contact us.