Whether selling your Tulsa home to a family member or a complete stranger, you may run into a few “bumps” along the road to closing. A low home appraisal. Inspection issues. All kinds of things may pop up while in escrow. One of those things could be that a title search uncovers a property lien. Yes, this is a serious matter. But, the good news is that it may end up only being a small speed bump rather than a roadblock if you handle it right.
Selling a Home With a Property Lien
What is a Property Lien?
When you owe a creditor money that you have not paid them, they may place a property lien on your home. This could be anything from owing a contractor money for work they performed to unpaid taxes to a judgment from a court case. In order for the sale to close, all liens must be taken care of first.
Your title company searches for liens during escrow. If any show up in the search, all other parts of the transaction come to a complete halt. Typically, the seller pays the lien and the sale continues as usual. However, if the seller refuses to pay, the buyer can either pay the lien or walk away. If the buyer walks away, they take their earnest money deposit with them since the seller, in essence, breached the terms of the sales contract.
What Should You Do About Any Liens?
First, determine if the property lien actually belongs to you. The title company searches by name. If you and a family member or anyone else have the same or very similar names, a lien may show up that does not actually belong to you. In that case, showing your birth certificate and address may be the only things you need to prove an error. Talk to your title company to see if they need anything else. However, if the lien legitimately belongs to you, discuss your best options of payment with your real estate agent and/or the title company first. You might need to contact the lien holder right away. Then, make arrangements to pay it off so that they remove the lien from your Tulsa property as soon as possible. That may mean adding them to the creditors paid from the proceeds of the sale at closing.
Lori Cain, REALTOR®, Serving Midtown and the greater Tulsa, OK area. Call 918-852-5036.
