Liens, Lawsuits and Judgments that could stop the Sale of your house
Did you know that lawsuits related to a property and liens and judgments are a real problem when you are trying to sell a house? Well it is….
Just a few years ago, we represented a buyer on a purchase of a house. All was great. The offer was accepted, the lender was doing their thing, but then we got a phone call from the title company. There was a problem. The seller had a dispute with a neighbor over a fence and there was a “les pendens” recorded on the property. This meant there was legal action that could affect the title of the property. A “cloud on the title” means there isn’t a title insurance company that will issue coverage for any mortgage lender or buyer. Screech! As buyers, we don’t know these things until the title company does the title search and tells us. Good thing is that the buyer can void the contract and get their Earnest Money Deposit back. In our case, the Seller and his neighbor decided to bury the hatchet and settle so the sale could proceed.
When we sign a Listing Agreement with a seller, we ask several questions. It’s imperative that the Seller be honest and forthcoming and tell their real estate agent about any legal actions against them, bankruptcy proceeding and foreclosures that could impact the sale of the property. These issues must be resolved before you put the house on the market.
If there is a tax lien, other judgments such as unpaid HOA dues, or unpaid contractors for work performed on the house, the title company will need to pay these judgments and liens with the proceeds from the house. These problems, unlike a lawsuit, don’t often cause a delay in the closing.
So moral of the story, let your agents know what is going on with your outstanding debt, lawsuits, and other possible obstacles that could create bigger problems when the home is sold. Good agents are here to help you and connect you with lawyers, accountants and other professionals to assist you and make the sale of your home stress free!
And if you’re wondering…… our buyers love their new neighbors!
