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My House Has a Tax Lien. Can I Still Sell It?
So your Waco home has received a tax lien. In addition to feeling an enormous amount of stress, many homeowners find themselves in the dark when it comes to what they can do to get themselves out of this situation. People often question if selling their home fast to settle the bill is a viable option. The answer is: Yes. You can sell your Waco house with a tax lien.
The catch? It can be complicated. A tax lien adds a wrinkle to the process of selling a house, and it’s important to understand how it all works before diving into anything.
How Tax Liens Work
A tax lien is a legally binding arrangement that guarantees the bank gets its cut if the home is sold. This is a way of matching a debt to a property. When a house is bought, the bank doesn’t own it while the buyer still has a mortgage (a common misconception). Instead, the bank places a lien on the house. So if a house is sold, the owner must pay off the full remaining mortgage before keeping any proceeds. Additionally, the house cannot be sold for less than the remaining mortgage (with an exception discussed a little later).
These principles apply to a tax lien as well. The government can put a tax lien on the property of anyone who is behind on their taxes, may it be state or federal. If a house with a tax lien is sold, the bank gets the amount owed before the seller gets the remaining amount.
How Does the Lien Change Selling Your House?
Selling a property with a tax lien can seem like the easy way out, but there is a catch: it can be difficult. First, a Waco home with a tax lien can only be sold if enough profit can be made from the sale to pay off all liens on the house, including mortgage.
Since the house is acting as collateral for the liens, you can’t get rid of that collateral without paying off the debt in full.
Despite this limitation, there are plenty of cases where you can sell the house for enough to cover your tax lien and still make a considerable profit. Especially if your lien isn’t from long-accumulated debt.
Negotiating With Lenders
If it is not possible to sell the house for enough, then the property is considered “upside-down”. This means the debt attached to the home is greater than the current market value of the house. In other words, no one is offering enough on the house to cover everything that you owe.
All is not lost at this point. The homeowner can negotiate with the lenders or the government to try a short-sale with the home. In this case, you sell your Waco home for as much as you can get. The money is then used to pay off all remaining debts. The homeowner receives no profit, but the debts are cleared in full.
Those who are owed money to get a say in this process. If they’re willing to take a loss to get paid now, they’ll agree to a short sale. But with a tax lien, you have to make sure all parties are satisfied. They’ll set a minimum sale value that you are allowed to accept to make sure they get the new agreed payment.
It’s possible to get the lender, the government, or both parties to agree to a short sale, making everything a little easier for you.
Sell Your Waco House the Easy Way
If you have a tax lien or any other reason to sell your Waco house fast, we can help. We buy houses in Waco regularly, and we’re deeply familiar with the many laws and regulations tied to a home sale. After all, we are We Buy Waco Houses! We can navigate all of it and give you cash for your home.
If you want to sell your house fast, contact us today at 254-331-1316 for a complimentary, no-commitment offer. We would love to help you!
