Selling a home can be nerve-racking, even at the best of times. For sellers, the due diligence period will be one of the scariest times. This is the time when buyers will take a closer look at the home to determine its true physical and financial condition. One of the worst news a seller can receive from this is knowing that there is a lien on the property. This is not a complete compromise, but it can cause significant delays and complications in closing the house.
Fortunately, it is still possible to make a deal with the franchises and finalize the sale. Here we show you how to do that and avoid this situation in the first place.
What is a Lien?
A lien is a legal right of a creditor or a claim against property for those unfamiliar with the term. Anyone who buys a house with the help of a mortgage is sure to have a lien on it. They exist to limit what the owner can do with the asset and to ensure that creditors are compensated for what is owed to them. Anyone trying to sell a home with a lien will need to increase it before they sell.
There are several types of concessions, which can be classified as voluntary or involuntary. Those received through a bank or lender prior to a mortgage are considered voluntary because you have agreed to accept the mortgage through a trust deed. Once your mortgage is paid off, the mortgage is canceled and you will have full title to the house. These types of privileges don’t hurt you (as long as you stick to your mortgage payments). However, involuntary liens are usually bad news for the homeowner and indicate that some form of debt remains unpaid.
These types of liens include:
Tax lien – A lien that a government agency imposes on your property against any unpaid income, business tax, or property tax. These usually come from the IRS after they have not received a response to inform you of your obligations. The only way to remove this type of foreclosure is to pay off the outstanding debt.
General Lian Provision – When a debtor fails to meet his financial obligations, the creditor can sue him for the balance owed. If the court rules in favor of the creditor, the creditor may place a lien on the debtor’s property.
Mechanical lien – Contractors who do not receive payment for work on a property can file a mechanical lien, also known as a building lien or a property lien. The debtor usually receives a demand for payment and a notice of intention before making this type of lien.
All of these things will show up on your credit report and can damage your credit score.
How to resolve the lien:
Here are some of the ways you can remove a lien on your property. A real estate attorney (needed to close homes in New York State) will play a vital role in making sure everything goes smoothly.
- Pay off debts
It is the most efficient way to release your property. Once paid, the creditor will file a release request with the same authority that registered the mortgage. After removing the franchise, you can transfer the ownership as you wish. With the help of your lawyer, you may even be able to negotiate a lower amount.
- Pay off the debt with the proceeds from the sale of the house
If you don’t have enough money to pay off the debt, you can use the proceeds from the sale of your home to cover the outstanding debt. Your real estate agent can list the mortgage in the settlement agreement. On the day of the closing, the excess will be deducted from the proceeds of the sale.
- Mortgage Release Request Form
It is not uncommon for privileges to be recorded incorrectly at times. If you find it invalid when foreclosure is being considered, you can file a foreclosure release form through your attorney. Make sure the form includes your name, the name of the lien holder, proof, the amount of debt paid, and a description and address of the property.
- Take the link
Another option to repay a lien you can’t afford is to get a bond. This will cover the costs of the franchise and allow the home transaction to continue. After closing, you can pay the deposit with the proceeds of the sale.
Ways to avoid lien:
Ideally, you will need to take steps to make sure you don’t get any liens on your property in the first place. You can achieve this by:
Getting Title Insurance – When buying a property, title insurance is one of the most important things you can get. NYC typically costs 0.4% to 0.5% of the purchase price and will make sure you don’t have any nasty surprises if the securities company fails to spot an old franchise. If this happens (more common than you might think), the address company will foot the bill for you.
Pay Bills and Taxes On Time – To avoid receiving liens on your property, make sure you pay all of your bills and taxes as soon as they are due. While it might be easier said than done, it’s still the best long-term solution.
Tax Lien Laws in New York:
Tax privileges are big business. So, once you are aware of the problem, it is essential to resolve the lien immediately, and here is why. If you own a home in New York and leave your property taxes behind, you could lose the home to a tax foreclosure. Not only can you lose your home, but you can also have foreclosures on your credit report.
However, the good news is that New York law allows you to “buy back” (keep ownership). But to redeem the property, you will have to pay the amount of the overdue tax lien or tax liens, including any fees permitted by law, before the redemption period expires. However, if you don’t want to get the property back, your home will be auctioned off or the tax district will own the property through the foreclosure process.
Can You Sell a Property in Lien in New York?
The burning question: can you sell a property in a foreclosure in New York? Yes you can! Of course, the details are important and require a discerning eye, but yes, it is possible to sell a home with a tax lien. But it goes without saying, it comes with its challenges. There are financial obligations and a lot of paperwork to maneuver before you can even consider listing a home. It assumes that you can resolve these issues in a timely manner.
How to Sell a Property in Lien in New York
There are several ways to sell real estate par excellence. You can try to do it yourself i.e. sell your house without a real estate agent, or you can hire a real estate agent to list and sell your house. However, in most cases the process is long, exhausting, complex, and mentally and financially exhausting.
Whether it’s the HOA, the government, or your bank, all of these parties have the power to stop you from selling your home with a tax lien.
At the end of the day, all of these organizations want the money owed to them, so they also have the option of selling assets to clear the debts owed to them. To remove the lien on your property and proceed with the sale of your home, the unpaid debt must be paid.
Once the debt is settled, a letter of satisfaction is issued by the people or party who made the mortgage on the property. Unfortunately, creditors know that most homeowners don’t understand their rights and don’t realize that they can dissolve the lien besides paying for it out of pocket. Here are some of the options available to resolve your deductible.
Use the sale of the house to pay:
It may seem like the only way to sell your home with a mortgage is to pay off the lien before listing. But you may be able to discuss with your creditors using the sale of the house as a form of payment. In conclusion, you can arrange to deduct the amount owed from your income and pay it directly to the people owed to settle the lien. The only problem, however, is that even if you manage to convince the creditor of this idea, you may have a hard time finding a buyer who is willing to buy a home with a concession. Most buyers do not understand the benefits and may cause the purchase contract to fail.
Sell your home to a cash buyer:
Another option is to sell your home to a New York cash buyer. When you are dealing with MLM, you want to work with someone who knows your current situation. Companies that buy homes in Brooklyn and other New York City cities have experience with tax liens and purchasing real estate with privileges.
They will work with you to resolve the issue and buy your home quickly, regardless of any liens imposed on the property. But on top of that, there are plenty of benefits to accepting a cash offer for your home.
Paying off a mortgage can affect your income, as can the payment of commissions to real estate brokers. When you work with a cash buyer like Homebuyers from CashBuyersNY, they don’t charge an agent fee when you buy your home.
Another selling advantage for homebuyers is that they can place a bid on your home within 24 hours and close it in as little as 7 days. So if you need to act quickly to avoid a tax foreclosure, find a new job, or avoid months of market stagnation, you can sell your home quickly and avoid the headaches.
Sale of the house as is with the attached reservation:
If the home you’re trying to sell has unfinished construction, water damage, a roof leak, or a number of other major repairs, you might be in a bit of trouble. You may ask yourself, “How am I supposed to handle these expensive and necessary repairs and pay for a tax lien?” One option you may not be familiar with is to sell your home as is with the reservation attached.
Here’s the downside – generally, to sell a home successfully, it must be in good repair to attract buyers, pass buyer inspections, and have a clear address. So, you will need to find a buyer who is willing to take on any situation in your home right now and understand the franchise situation you are trying to resolve.
The average home buyer may find this too difficult, but the CashBuyersNY don’t. Another advantage of working with a Cash Buyer NY is that they buy homes in their state – and this is even more of a reason that working with a home buying company is a better option.
Although it is cumbersome, a house can be sold with a mortgage. Every homeowner who knows they have one on their property should be transparent with their listing agent from the start. It will almost certainly show up in your title search, so you can come up with a plan of action before it becomes a problem by being upfront about it.
Getting a tax lien on your New York property can be stressful, especially if you don’t know where or how to get the money to pay it off. But as you have discovered, you have many options, and it is possible to sell your property with a franchise. However, working with knowledgeable New York real estate professionals is essential to help run this smoothly, pay off the franchise, and move on to bigger and better things. Whether you need to “sell my house fast” in Long Island, Queens or Brooklyn, CashBuyerNY is here to help. Don’t hesitate to contact them and get a cash offer on your home today!