Selling a house in Rhode Island can be a stressful and time-consuming process, especially when there are property liens involved. If you’re not familiar with liens, they are legal claims against a property that can be placed by creditors, the government, or even contractors who have gone unpaid for work they have done on the property. These claims will “cloud title” meaning legal title cannot be passed to a buyer until the liens have been settled. Property liens can make selling your house in Rhode Island more complicated than you might expect.
If you’re looking to sell a house with property liens in Rhode Island, it’s important to understand your options and the steps you can take to make the process as smooth as possible. In this article, we’ll cover everything you need to know about handling property liens when selling a house in Rhode Island.
1. Determine the Type of Lien
The first step to handling a lien is to determine what type of lien you’re dealing with. Title companies and real estate lawyers can often run a preliminary title search to uncover any potential property liens you may have placed against your house. There are several types of liens which can be placed on a property, including:
– Tax liens: These are liens placed by the government when a property owner fails to pay their property taxes or income taxes. Failure to pay municipal property taxes will often result in the homeowner’s property being sold by auction on the front porch of the property. IRS income tax liens are collected against the homeowner’s assets and may come out of the profits if/when the property is sold. If the sale of the property and the homeowner’s assets are not enough to pay the balance of an IRS tax lien, an “Offer in Compromise” may be submitted to the IRS which is essentially a negotiation for a lower dollar amount of the lien. A local CPA or tax attorney can help you to navigate the complexities involved with tax liens.
– Mechanic’s liens: These are liens placed by contractors or builders who have done work on the property and have not been paid. Be sure to negotiate with your contractor ahead of time and get all agreements written down so you protect yourself regarding level of service provided and consideration offered. You will often receive written notice from a contractor if they are placing a lien on your property, however, these liens often come up unnoticed during closing and can eat away at your bottom line. Having a good working relationship and open communication with any contractor who does work on your house in Rhode Island will protect you from any unexpected mechanic’s liens.
– Mortgage liens: These are the most common and are placed by a mortgage lender when the homeowner defaults on their mortgage payments. This is often the case before foreclosure proceedings begin. Most often, mortgage liens can be removed by paying any arrears and interest owed to your mortgage lender. Your mortgage lender will make you aware if you are late on payments and will send you written notice before foreclosure proceedings begin.
– Judgment liens: These are liens placed by a court when a homeowner loses a lawsuit and owes money to the plaintiff. If you have any unpaid debts, creditors are allowed to file for and place a judgement lien on your property for the balance of the debt owed. You will often receive written notice of a judgement lien placed on your property, however, these often show up unexpectedly at closing and can eat away at your bottom line.
Each type of lien listed above has its own set of rules and procedures that must be followed to resolve them, so it’s important to understand which type of lien you’re dealing with before moving forward. No matter which type of lien you are dealing with, you’ll want to resolve it before listing your property for sale, or by utilizing the assistance of a professional property buyer such as Home Tree. At Home Tree, we will make you a fair cash offer for your Rhode Island property in As-is condition, we will negotiate the balance of any liens at closing on your behalf and you can be done with your unwanted property. We’ve worked with sellers in the past who have had liens placed on their property and we know it can be a headache, that’s why we offer Rhode Island sellers more options when it comes to selling their house with property liens. Call today to learn more about property liens and ask about our free home valuation services! 401.684.3937
2. Contact the Lien Holder
Once you’ve determined the type of lien you’re dealing with, you’ll need to contact the lien holder to find out exactly how much you owe and what steps you can take to resolve the lien. Depending on the type of lien, you may be able to negotiate a payment plan or settle the debt for less than the full amount owed. Verify the exact amount owed and any accruing interest/fees by requesting a payoff statement from each lienholder detailing the total amount required to satisfy the lien.
If you cannot pay the full amount, negotiate with lienholders to settle the debt for a lesser amount. Further, discuss possible payment plans that might allow the sale to proceed while you continue to pay off the lien. If you’re unable to negotiate a settlement, you may need to pay off the lien in full before you can sell your house. This can be a challenging situation, especially if you don’t have the funds available to pay off the lien. It can be especially frustrating for Rhode Island homeowners who need to sell a house right away, but are stuck because of the liens that have been put on their property.
Depending on the amount of the liens, I often advise sellers to pay off the liens from the proceeds of the home sale. This is typically handled at closing and will be subtracted from the net proceeds.
If you believe a property lien that has been placed on your Rhode Island house is invalid, you may need to take legal action to dispute it. Consult with a real estate attorney for guidance. Call Matt at Home Tree for recommendations on local real estate attorneys to get started! 401.684.3937
3. Consider Selling to a Cash Home Buyer
If you’re unable to pay off the lien and don’t want to go through the hassle of negotiating a settlement with the creditor, you may want to consider selling your house to a local cash home buyer like Home Tree. Cash home buyers specialize in purchasing houses quickly and can often provide a cash offer within 24 hours of seeing the property. Matt, the owner of Home Tree, is also a Realtor in Rhode Island and offers sellers more options when it comes to extracting the value from their property. Whether you want a cash offer and a quick closing or you want to offer seller financing to a buyer and close on your timeline…we can get the job done according to your terms.
When you sell to a cash home buyer in Rhode Island, you don’t have to worry about paying off any liens or making repairs to the property. The buyer will take care of everything for you, including debts, repairs, and even the clean up, allowing you to sell your house quickly and move on to your next adventure. If you want to sell your house with property liens in Rhode Island – Call Matt today and receive a no-obligation cash offer for your Rhode Island property. 401.684.3937
4. Work with a Real Estate Agent
If you’re not sure what to do when dealing with a lien, you may want to work with a real estate agent who has experience handling these types of situations. A real estate agent can help you navigate the process of selling your house with property liens and can provide guidance on negotiating a settlement or finding a cash home buyer. A good agent can also conduct a profit/loss analysis for your house… accounting for property lien payments and closing costs to give you an idea of what your take-home will be after a sale.
When choosing a real estate agent, make sure to choose someone who has experience working with liens and who understands the local market in Rhode Island. This will ensure that you get the best possible outcome when selling your house. Keep in mind, that working with an agent can take considerably longer, and may require a hefty amount of cash out of pocket. Matt, the owner of Home Tree is also a Realtor with Keller Williams in Newport, Rhode island…he helps sellers all around the state sell their home according to their terms and on their timelines. Give him a call today to learn more about listing your home for sale in Rhode Island. 401.684.3937
Handling property liens when selling a house in Rhode Island requires diligence and careful planning. Start by identifying and verifying all liens, negotiate with lienholders if necessary, and ensure all liens are cleared before closing. By working with experienced professionals and following the proper legal procedures, you can successfully navigate the sale of your property even when liens are involved.
If you want to sell your house quickly in Rhode Island, consider selling to Matt at Home Tree LLC. We buy houses directly and can help with any difficult property or situation. If you have a lien on your property and need to sell if fast, our team can help. Contact us today to get started! 401.684.3937