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Can You Sell a House with a Lien on It?

lien on house

Can you sell a house with a lien on it? That question may currently be bouncing around your head as you are trying to work out what you want to do with your Rhode Island property.

Selling your home is already a  complicated endeavor. It only becomes more difficult when you need to consider a lien.

Allow us to lend a helping hand.

In this article, we will explain how a lien can affect your home-selling plans. We will also highlight some things you can do to make this situation easier to manage.

What Is a Lien?

Before we jump into selling a home with a lien, let’s first take the time to define a lien.

A lien is another party’s legal claim on a particular property. The party that places the lien does so with the intent of collecting on debt that the property owner owes them.

You can place liens on different property types; typically, a creditor issues it after a debtor purchases something expensive. In this article, we will focus on the liens that are on homes.

By issuing a lien against your home, your creditor can control how you manage that asset. Unfortunately, it can also derail major transactions due to its presence.

If you fail to fulfill your obligations to the party that issued the lien, you could eventually lose your home. They may exercise their legal right to foreclose your property and effectively take that asset away from you.

What Are the Different Types of Liens?

Different types of liens can be against properties. Let’s discuss those in this section of the article.

Mechanic’s Liens

First off, we have the mechanic’s liens.

According to Bankrate, a mechanic’s lien is typically issued when a property owner fails to pay a contractor, subcontractor, or supplier. The parties will use the mechanic’s lien to recoup the amount owed to them.

Tax Liens

A tax lien is a legal claim the government can make against your property. For example, the government will issue a tax lien if you owe them overdue taxes. Tax liens can be for income, estate, and property taxes.

Tax liens can cause you to lose control of your property. They may stop you from completing transactions related to your Rhode Island home.

Consensual Liens

As its name implies, a consensual lien is one that a property owner voluntarily takes. They do so in exchange for the benefit of some kind.

A lender will issue a consensual lien if you decide to take a mortgage out on your property. Consensual liens will also apply if you take out a second mortgage or refinance your current home loan.

You must pay your mortgage on time to avoid the consequences of a consensual lien. Fail to pay your mortgage, and you could lose your property.

Judgment Liens

Lastly, we also have judgment liens. A judgment lien may be issued after a creditor takes you to court.

If the creditor successfully argues that you owe them compensation, the court may issue a judgment lien against your property. As you can imagine, things can become complicated once the court gets involved. They even have the authority to foreclose on your property, so you cannot afford to disobey the terms of the verdict.

Judgment liens limit what you can do with your property. They can get in the way of you selling your home.

Can You Sell Your Home if It Has a Lien on It?

Whether it is due to your job, your family, or a separate reason, you may suddenly find yourself in a position where you need to move out of Rhode Island. You may need to sell your Rhode Island home to secure the funds needed to complete your move. Unfortunately, doing that will be easier said than done because you have a lien on your property.

As we noted in the previous section, a lien can actively get in the way of completing transactions related to your home.

So, does that mean that selling your property is off the table if a lien is on it? Well, that is not necessarily the case.

Selling your property is still possible in that scenario, but it will take more work. The actions you take to sell your home depend on the type of lien covering it.

Continue below to better understand what you need to do in your specific situation.

Selling Your Home if a Mechanic’s Lien Is on It

Is a statutory lien currently issued against your property? In that case, you will need to settle that before you can move forward with any sale.

Legal cases may stem from the issuance of a statutory lien. Therefore, you should hire a real estate attorney if you want to resolve the issue related to your statutory lien.

Speak to the contractor, subcontractor, or supplier who issued the mechanic’s lien against your property. Your goal should be to reach an agreement allowing you to settle your debt while selling your home.

Present a payment plan to the party who holds the lien and put down your pledge to compensate them in writing. If the other party agrees to the payment plan, they will remove your property’s lien.

You can also negotiate with a potential buyer and have them handle your debt. Direct a portion of the money paid by the home buyer to the lien owner. Once your creditor receives the payment, they can remove the lien, and the buyer can claim full ownership of the property.

Make sure you get all these agreements down in writing to protect yourself from false claims down the line.

Selling Your Home if a Tax Lien Is on It

Moving your Rhode Island property is still possible even if a tax lien is on it. Getting rid of the tax lien is easy enough. The IRS will remove the tax lien within 30 days of settling your tax debt. So work closely with your real estate lawyer to remove the tax lien as soon as possible.

Note that the IRS also offers payment plan options to homeowners who cannot pay their taxes on time. Talk to the IRS about those payment plans and check if one of them makes sense for your current financial situation.

Selling Your Home if a Consensual Lien Is on It

Before selling your home with a consensual lien, you must first speak to your mortgage lender. You will need to pay them before they remove the lien, so it would be best to have a conversation with them early on.

In this scenario, you can approach your mortgage lender as you would negotiate with someone who issued a mechanic’s lien against your property. Present them with your plan to pay the rest of your mortgage if you want them to sign off on the sale.

You can arrange a payment plan with your mortgage lender or use some of the money you are receiving from the sale of your property to pay off your debt completely.

Selling Your Home if a Judgment Lien Is on It

The methods you use to settle other types of liens prior to selling your home will also work if you are dealing with a judgment lien. As long as you settle your debt to your creditor first, the court should remove the lien on your property.

It is worth noting that judgment liens expire in Rhode Island. According to, a judgment lien in the state is only effective for twenty years. Of course, waiting twenty years to sell your Rhode Island property is probably not something you can afford to do if you need to move sometime soon.

Can You Dispute the Lien Issued against Your Rhode Island Property?

Settling a lien issued against your property is one thing. On the other hand, you owe someone money, so it is only fair that you pay up.

But what if the lien on your property is invalid? What should you do then?

Sadly, mistakes can happen while issuing liens, and it is often up to the homeowners to do something about those errors.

Hire a real estate attorney and go to court with the intent of getting the invalid lien removed. Provide evidence showing that they should never have issued the lien in the first place and refute the false claims by the other party.

Heading to court may be your only option if an invalid lien is on your property because the other party will likely not negotiate with you in good faith. Hopefully, you will receive compensation for proving that you did nothing wrong.

How Do You Negotiate with a Buyer if There Is a Lien on Your Home?

We mentioned that one of the ways you can sell a home with a lien on it is by using the payment to settle your existing debt. Your creditor may not take issue with this arrangement because they will still get their money. However, you may need to negotiate with your home buyer if you want them to agree to a setup like this.

Upon learning that there is a lien on your property, your buyer may decide they do not want to get involved anymore. After all, there are other Rhode Island properties available on the market. They can still put in offers for those properties.

This is where you may need to offer some concessions as the property owner. For example, lower your asking price for your home in exchange for the buyer helping you settle your outstanding debt.

Give them real incentive to choose your home over other Rhode Island properties.

You can also make settling the lien as easy as possible for your buyer. Ask them if they would prefer to pay for the lien as part of their closing costs or if you should take the appropriate amount from their payment. Make the home buying process easier for them, so they are not tempted to shop elsewhere.

If you are trying to sell a home with a lien on it, you must acknowledge the possibility that you will be negotiating from a position of weakness. In that position, hiring a real estate selling agent is a must. Their work will be critical to you landing the best possible deal.

Can You Sell Your Home without Resolving the Lien?

Buying a home is a major transaction. Most buyers conduct title searches to ensure that the properties come with no strings attached. As the seller, there is no sense in hiding the information because it will come up sooner rather than later.

That said, you can sell your home without doing anything about the lien. If a buyer decides that they want to buy your home without settling any liens beforehand, they will assume responsibility for those debts.

You should not expect a buyer like this to come around when you put your home up for sale, but it could happen.

Before selling your home to that type of buyer, you should double-check your property. The buyer may know something about your property that you do not, which could be why they are willing to accept the liens. Therefore, study updated information regarding your property before you sign off on any sale.

Do you need help selling your Rhode Island home that currently has a lien on it? If so, we at RI Home Store can provide some assistance. Contact us today and let us help you navigate that complex process.

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