You have a tax lien on your house, and you’re getting ready to sell. But can you sell your house with a lien on it? Not only can you, but it’s actually the best way to get rid of the lien. Let’s take a look at the process of selling a house with a tax lien — and why you might want to sell your house fast.
Can You Sell Your House With a Tax Lien?
Many people misunderstand a tax lien. A tax lien doesn’t prevent you from selling your house. It prevents you from selling your house without the tax institution knowing about it. The tax company will be notified that you’re selling your house, and your debts will need to be paid from the proceeds.
A tax lien doesn’t stop you from selling your house. Technically, most debts are a lien. A mortgage debt is a lien on your house, and a car loan is a lien on your car. All it means is that there’s someone else that essentially “owns” part of the value from your house.
Importantly, a lien also doesn’t mean that the tax collection stops. Tax collection, debt calls, and injury to your credit score will still occur after a lien has been placed.
How Much Do You Owe in Taxes?
A tax lien can occur because you owe any type of taxes — state, federal, or (of course) property taxes. A lien makes it impossible to sell your house without paying off the tax debts. So you need to know how considerable those debts are.
Let’s say you have a $200,000 house, and your tax debts are $50,000. When you sell your house, you’ll get $150,000, and they’ll get $50,000. That’s not a big deal if you own your house outright. But let’s say you still owe $150,000 on your home. Your mortgage company will get $150,000, your taxes will be paid with $50,000, and you’ll get nothing.
That’s not a reason not to sell your house (far from it). But it’s something you need to think about. If you sold your house for $190,000 instead, you’d actually owe $10,000.
What Happens When You Sell Your House With a Tax Lien?
Now, here’s the good news. When you sell your house with a tax lien, you actually don’t do anything. The person buying your house pays the escrow company. The escrow company pays the taxes and pays you. And that’s it. It’s all handled.
Once the tax lien has been resolved, the house will change hands. And because you’ve paid off your taxes, you don’t need to worry about them anymore. Many people decide to sell their houses to cover their tax debts because it lets them move forward free and clear.
What’s the Fastest Way to Sell Your House?
Here’s another thing you need to consider. When you have tax debts, they don’t just stop at a lien. They’re going to try to collect money from you. And that can mean forcing the sale of property, garnishing wages, and so forth.
The best thing you can do is sell your house fast. We buy houses in cash — regardless of the situation. And that also means that we can buy houses faster than those with a mortgage. You don’t need to worry about a deal falling through or about waiting for a mortgage company to respond. You can get your house sold within days, not weeks. Are you ready to sell your house fast? We buy houses throughout the greater Baton Rouge area. Contact us today at Geaux Home Buyers.