If your property has a lien or a legal claim from a creditor, you may face a few challenges when trying to sell the property. It’s usually best to resolve the lien before putting your house on the market. But in some cases, you may be able to sell to a buyer who clears the lien for you using the proceeds from the sale.
If you are researching, “Can I sell my house with a lien on it in Arizona?” here is what you need to know.
What Is a Lien on Your Property?
A lien is a legal claim against your property by a creditor as security for a debt you owe. This gives the creditor the right to receive the payment you owe from the property, preventing you from selling or refinancing it until the lien is cleared.
Liens can be attached to homes, cars, furniture, or other types of property. When there is a lien on a home, the homeowner can face difficulties in selling the property.
Resolving a lien usually involves repaying the debt or negotiating a settlement with the lienholder. Then, the lender would provide a Lien Release document, which you would file with the county recorder’s office to remove the lien from the public record.
However, if you do not have the funds to satisfy the debt, you may explore other options, such as selling the house with the lien on it.
Types of Liens Impacting Arizona Properties
There are a few different types of liens in Arizona that can affect your ability to sell your property.
- Mortgage liens: This is the most common type of lien placed on properties. The property owner agrees to this voluntary lien when they finalize a loan application. If the property owner fails to repay their mortgage, the lender can use the lien to seize the house and sell it.
- Unpaid property taxes: The local government can place a lien on your property if you have failed to pay your property taxes.
- Judgment liens: These liens are issued by the court when you owe money in a legal dispute arising from unpaid debts.
- Mechanics’ liens: If you fail to pay a contractor or supplier for work on your home, they can seek a mechanics’ lien to pursue the funds you owe.
- HOA liens: Failing to pay your HOA fees can also lead to a lien on your property.
- IRS tax liens: The IRS can seek a lien against your property if you are significantly behind on federal taxes.
How a Lien Can Affect Your Property Sale
Having any active liens on your property can affect the process of selling the home in a few different ways. The bottom line is that in many cases, you cannot sell a home or refinance a mortgage until you have resolved the lien.
- Delay closing: The title company cannot transfer ownership of the property to the new buyer until the lien is released, in most cases. This can delay the closing process significantly.
- Prevent you from attracting buyers: Liens appear when a potential buyer conducts a title search of your property. Having an active lien could ward off buyers who do not want to deal with the hassle of this issue.
- Reduce your sale proceeds: You may decide to pay off the lien using the proceeds from your home sale, but this will reduce your net profit from the sale.
- Lead to financing problems from buyers: If a buyer wishes to purchase your home with a mortgage, they may have trouble qualifying for a loan. Lenders don’t often approve mortgages for properties with unresolved liens.
How To Sell a House With a Lien in Arizona
Can you sell a house with a lien on it in Arizona? It is possible to sell your house with a lien, but you will need to understand a few considerations when doing so. Following these steps can help you approach the lien-affected home-selling process strategically.
- Research existing liens on your property. Whether you suspect or know that your house has a lien, it is a good idea to conduct a title search to verify the lien and look for any other potential issues that could impact your sale. This involves searching through public records to uncover title issues and verify ownership of the property. You might enlist an Arizona title company to complete this process for a small fee.
- Evaluate the lien to determine its validity. If you are confused about why there is a lien on your property or think it may not be valid, you may want to conduct an evaluation of it with the help of a real estate attorney. It might be a fraudulent lien, or it may contain outdated information that no longer reflects your balance.
- Address the lien. If the lien is valid, taking care of it before you list the house for sale is a good idea. You can explore paying off the lien with the creditor or negotiating a settlement or payment plan. Otherwise, you can look into transferring the lien to another property you own, if possible. This would leave the initial property with a clean title that makes the selling process easier, but it is not an option for every type of lien.
- Obtain a Lien Release document. After settling the lien, you can request a Lien Release document from the lender verifying that you have cleared all unpaid debts on the property. Submit this document to the county recorder’s office to terminate the lien and prevent it from appearing in future title searches.
- Sell the home. Now, you are free to sell the home however you would like to, without any title issues affecting the property.
Finding a Buyer Who Will Purchase a House With a Lien
While selling a house with a lien in Arizona can be challenging, you do have options. Some may be willing to purchase the home with a lien.
For example, cash buyers like Joe Homebuyer purchase properties with liens and other title issues. Often, these buyers purchase the home with the lien, then resolve the lien before closing on the sale. They provide a cash offer, meaning they won’t need to apply for a mortgage and risk being denied because of the lien.
There are a few benefits you can gain when you sell to a cash buyer instead of trying to list your home on the market:
- The process is fast and simple: You can sell your property in a matter of days. Cash buyers provide a competitive offer within 24 hours of you contacting them and can often close within seven business days.
- Cash buyers have experience with these properties: Unlike a traditional buyer who may be caught off guard by a lien appearing on a title search, cash home buyers have experience purchasing homes with title issues and know how to navigate these sales.
- You won’t risk the deal falling through: In a traditional sale, the buyer can back out of the sale at any time. This is a real possibility if your Arizona property has a lien or other title issues. With a buyer like Joe Homebuyer, you can receive a guaranteed closing, with no risk of the sale falling through.
- Willingness to work with the lienholder: Some cash homebuyers are willing to work out an arrangement with the lienholder to resolve the lien during the home sale transaction, saving you the stress of handling the lien yourself.
- You won’t pay any fees or closing costs: With a cash homebuyer, you can avoid paying real estate agent fees and closing costs, which can be helpful if you are already in financial distress due to the debt that led to the lien.
- You can sell your house entirely as is: You won’t have to make repairs or updates to your home, stage it, or do any other tasks to get it “market-ready.” You can sell your home completely as is to a cash buyer and start moving forward.
Selling your home to a cash buyer may be a good idea if you cannot afford to resolve the lien before putting your home on the market.
Request a Competitive Cash Offer From Joe Homebuyer Today
Arizona property sales with liens can encounter a few roadblocks that delay the selling process. Can you sell your house with a lien on it in Arizona? If you sell to a cash buyer like Joe Homebuyer, you can avoid several of the challenges that typically arise with this process and gain a clean slate.
Joe Homebuyer buys homes for cash across Arizona, with no fees, commissions, or closing costs. We aren’t afraid to purchase homes with liens or other title issues and do whatever we can to assist sellers in navigating these concerns.
We can close on your timeline and work out a deal with the lienholder to resolve the lien and help you move forward. Request your free, competitive cash offer today by calling (602) 529-1268.
