What You Need to Know About Property Liens Before Buying a Home
Imagine you’re searching high and low for that perfect home 🏡. Every open house, every listing, and then you finally find the one. But just as you’re ready to move forward, you discover there’s a lien on the property. 😮💨
Liens can complicate a real estate transaction because they’re attached to the property itself—not the owner. This means any debt or legal claim follows the property, and it’s critical to address them before completing your purchase. Here’s a guide to understanding property liens and ensuring your dream home doesn’t come with unwanted baggage.
Types of Property Liens
1. Mortgage Liens Mortgage liens are the most common and straightforward. They remain on the property until the mortgage is fully paid off. Before closing, ensure all mortgage liens are resolved, as they must be cleared for a clean title transfer.
2. Income and Property Tax Liens If the property’s previous owner hasn’t paid their income or property taxes, the government may place a lien on the home. These liens take priority and must be settled before any other debts tied to the property. Researching tax liens early in the buying process is essential.
3. Judgment Liens A court case against the previous owner can result in a judgment lien being placed on the property. This type of lien must also be resolved before the property can change hands.
How to Check for Liens
You don’t need to be a detective to uncover potential liens on a property. Here are two key methods:
- Public Records Search: You can start by checking public records for any liens attached to the property. This can usually be done through your county clerk’s office or an online database.
- Title Company Services: A title company is your best ally in ensuring a smooth transaction. They’ll conduct a thorough title search to identify any outstanding claims on the property and provide title insurance to protect your investment.
Removing a Lien
If you discover a lien, don’t panic. The seller is responsible for clearing all liens before closing. Here are some common ways liens are resolved:
- Payoff Agreements: The seller pays the debt associated with the lien using proceeds from the sale.
- Negotiations: In some cases, the lienholder may agree to a reduced payoff amount to expedite the transaction.
- Legal Action: If there’s a dispute over the validity of a lien, it may require legal resolution before proceeding.
Protect Yourself as a Buyer
Before signing on the dotted line, ensure:
- All liens are cleared by the seller.
- Your title company provides a title insurance policy.
- You’ve reviewed the property’s title history for any red flags.
Smooth Sailing into Homeownership
Buying a home is one of the most exciting milestones in life, but it’s essential to approach the process with diligence. Liens don’t have to derail your dreams of homeownership—with the right information and professional guidance, you can navigate these challenges seamlessly.
Looking to buy a home in 2025? Let’s make sure your journey is smooth and surprise-free. Contact us today to get started on the path to your perfect home!