Can You Sell a House With a Lien In Boston MA?

Amidst this period of uncertainty, numerous homeowners in Boston are contemplating selling their properties.

The process of selling a house can be complex and overwhelming even under the best circumstances.

However, what if you discover a lien on your Boston Mass property? Is it possible to sell a house with a lien against it? Learn more about this and the necessary steps involved in selling a house with a lien in MA.

What Is a Lien on a House in Boston?

A lien is a legal right or claim against assets. Typically used as collateral to satisfy outstanding debts, a lien serves as a guarantee for an underlying obligation.

For instance, failing to repay a loan constitutes an underlying obligation. Should this obligation go unmet, the lender or creditor may have the authority to seize the asset.

A lien on a house pertains to the house itself as the asset. This situation arises when an individual fails to meet specific financial obligations.

While liens can be resolved, refusal or neglect to address the obligation may lead to the seizure of the home from its owner.

Furthermore, liens on your home can have adverse effects on your credit score. By settling debts or establishing payment arrangements, homeowners can eliminate liens.

What Are the Most Common Liens?

There are a number of different types of liens in Boston that can be filed against your property. Let’s take a look at the most common property liens.

Homeowners Association Lien

If you have either broken the rules of your Boston MA Homeowners Association (HOA) or haven’t been paying the fees, the HOA can file a lien against your property.

The quickest and easiest way to make this type of lien go away is to pay the money that you owe. The lien will then be removed from your property.

Massachuseets Department of Revenue Lien

If you haven’t paid state taxes, a Department of Revenue lien can be filed against your property. Of the different types of liens, this one is more serious and might require that you seek the counsel of an attorney or hire a CPA.

Again, the best thing to do is always to pay the lien. If you can’t, there might be other options.

You might be able to substitute collateral for your home. If the lien is on your primary residence, for example, and you also own a rental property, you might be able to transfer the lien. This can help you go through with your sale if it’s essential that you sell your home.

Materialman Lien

This is the easiest lien to rectify, and it’s also the most common. The materialman’s lien is when a contractor or a materials provider hasn’t been paid for work or materials they’ve provided for the home.

The best way to resolve this type of lean quickly is generally to pay the debt. Then you can go ahead and move forward with selling the property.

If the debt is too steep for you to be able to pay off in one chunk, there are also other options. It’s possible that your real estate broker will be able to negotiate adding the lien repayment into the closing costs of the sale. If this happens, though, it’s obviously going to be deducted from the profits you expect to realize from the sale of your home.

IRS Lien

This is the most problematic and serious of all of the types of liens in Boston. This is a lien filed by the Internal Revenue Service (IRS) as a result of a homeowner not paying their federal taxes. In order to deal with this type of lien, it is almost always required to hire both a CPA and a lawyer.

The IRS doesn’t make settling this type of lien easy. They have super-priority over all other types of liens. Time-consuming, difficult, and frustrating to settle, it’s very different to have an IRS lien than a materialman’s lien, for example.

The amount of time it takes to deal with an IRS lien can slow down the sale of your home. This means that it’s more likely that the buyer could back out and look for another property.

Do Liens Expire In Massachusetts?

There are different laws in every state regarding the statute of limitations on liens. Unfortunately, waiting for the time period to end isn’t the best way of dealing with a property lien. This is because in most states, creditors have the ability to extend a lien by refiling it once the statute of limitations has been reached.

How to Sell a House With a Lien in Massachusetts

The best way to resolve a lien in order to move forward with the sale of your house is to pay off any outstanding debts you have and get your title cleared as quickly as possible.

If the debt is more than you can afford to pay, it’s possible you can use the proceeds from the sale of your home to pay the rest of the debt. Your real estate agent will have to write the lien repayment right into the settlement agreement. In this scenario, the lien amount will be taken out of your proceeds.

In many instances, clearing your title is as simple as verifying that the debt has been satisfied and that the satisfaction of this debt has been properly recorded.

Sometimes, though, liens are more complicated. This might require hiring a lawyer and a CPA to help you dispute the liens. The cost of hiring an attorney could still help you save thousands of dollars and also allow the sale of your house to continue going forward.

It’s also possible, as mentioned previously, to transfer the lien to another asset, such as another property.

You can also take out a bond if you can’t afford to pay a lien. This is an expensive way of dealing with the issue, but it can help you move forward with the sale of your home. Essentially, the bond acts as a security for the lien, so you can carry on selling your Massachusetts house with a clean title.

Clearing Your Title as Soon as Possible Should Be a Priority

Dealing with a lien on your property can complicate the process of selling your house in Boston. It is crucial to clear the title of any liens by promptly paying off the debts to prevent any delays in the sale of your home. This proactive approach can help streamline the selling process and provide peace of mind to potential buyers.

To prevent such issues, it is advisable to stay current on all debts and financial obligations. Falling behind on payments can deter potential buyers and lead to significant delays in the sale of your property in Boston, MA. Taking proactive steps to address any liens can enhance the marketability of your home and facilitate a smoother selling experience. Contact us for expert guidance on dealing with property liens.

How Can You Prevent Title Issues In Massachusetts?

When preparing to sell your home in MA, there are several essential steps to safeguard against potential title issues.

First and foremost, invest in title insurance when purchasing your property. Title insurance provides protection in case a previous owner had a lien on the property, relieving you of the responsibility of dealing with such financial burdens.

Additionally, ensure timely payment of all taxes and fees associated with your property. This diligence is crucial, especially if you have plans to sell your home in the future.

If there are concerns about potential liens on your property, it is advisable to disclose this information to your real estate agent. While not legal experts, real estate agents can offer guidance on the necessary steps to address these issues, such as consulting with a CPA or an attorney.

Selling a House With a Lien In Boston Massachusetts On Your Own

Selling real estate with a lien on your own is indeed a viable option, although it can be quite time-consuming and stressful, to say the least.

Liens filed against your property by entities like the IRS, an HOA, or the bank can hinder the sale of your home until the debt is resolved. Moreover, they possess the authority to sell the property to recover the owed debt.

To proceed with the sale independently, the debt secured by the lien must be settled. Subsequently, upon repayment, the lienholder will furnish a Letter of Satisfaction.

Alternatively, a simpler and less stressful route would be to sell your property to a cash buyer like Velney Development and resolve your lien concerns with cash in hand.