How to Sell a House With a Lien in Missouri
Discovering a lien on your property can feel like a major obstacle to selling, but it doesn't have to stop the sale. This guide explains the types of liens common in Missouri, how they affect a sale, and your fastest options for moving forward.
What Is a Property Lien?
A lien is a legal claim against a property that must typically be satisfied before the property can be sold with clear title. Liens can be placed by mortgage lenders, the IRS, the state of Missouri, contractors, judgment creditors, and homeowners associations. Most liens must be paid off at or before closing.
Common Types of Liens in Missouri
Mortgage liens are the most common — these are paid off from the sale proceeds at closing. Mechanic's liens arise when a contractor or supplier isn't paid for work on the property. Tax liens can be placed by the IRS (federal tax lien) or by the state or county for unpaid property taxes. Judgment liens arise from court judgments against the property owner.
How Liens Affect the Sale Process
When you sell a property, a title company will conduct a title search to identify all liens. Most liens must be paid off from the sale proceeds before the buyer receives clear title. If the total of all liens exceeds the property's value, you may be in a short sale situation, which requires lender approval.
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Selling a House With a Lien to a Cash Buyer
Cash buyers like Midwest Equity Advisors are experienced in buying properties with liens. We work with title companies to identify all liens and can often structure the transaction so that liens are paid off at closing from the sale proceeds. This means you don't need to pay off the lien out of pocket before selling.
Steps to Take Before Selling
Before listing or selling your property, request a payoff statement for each lien. Verify the amounts are accurate — errors in lien amounts are not uncommon. If you have a federal tax lien, contact the IRS to discuss your options. A real estate attorney can help you navigate the process, especially if you have multiple liens or a complex situation.
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