In the unfortunate event that a family member property owner dies and you inherit their house near Columbus, Ohio, you may be wondering what to best thing to do with it is. You may be even more perplexed if this inherited property and means you’ve inherited a lien.
Here we’ll discuss what you need to know about inheriting a house with a lien in Columbus, Ohio. We’ll cover the basics including what a lien is, how it can affect your inheritance, and the process for selling a property with an attached lien.
What Is a Lien?
For starters, a lien is a legal claim that one person has over a debtor’s property. It is a legal term used in property law that refers to the right of a creditor (usually a bank or other lender) to secure payment of an obligation, usually through attaching assets the debtor owns.
In layman’s terms, a lien gives the creditor repayment priority over other creditors. Lien rights vary significantly depending on the type of debt owed and the jurisdiction of the property, as well as the associated state law. For example, in most U.S. states, liens are only available for loans of money (i.e., mortgages). In many European countries, though, they are also available for other types of debts.
Types of Liens
There are three main types of liens:
Real Estate Lien
A real estate lien applies to real estate generally and can be filed by the mortgage holder or anyone who has lent money to the property owner.
It is a legal document that gives the creditor (the person who holds the lien) the right to sell the property until they are repaid for what they have invested. A lien is also used as a form of security. So, if you owe money on your house, the lender may want to seize your property to collect on the underlying debt.
A mechanic’s lien is a legal claim that allows general contractors and other construction workers to collect money they are owed for work on a property. A mechanic’s lien is also known as a property lien or an equipment lien. Mechanic’s liens are considered tax debts and can be collected through civil court judgments, just like any other tax debt.
Personal Property Lien
A personal property lien is used when a person has lent money to someone else for personal items like furniture or cars. Houses too can have liens placed on them to collect taxes or a judgment filed against the owner. Sometimes, the lien can be sold to recover the amount owed.
What Property Type is Subject to a Judgment Lien in Columbus, Ohio?
In Columbus, Ohio, judgment liens are most commonly applied to houses. A judgment lien is placed on the property by the court after determining that the person the judgment favored is owed money by the individual who lost the case. The lien holder can then sell the house outright to collect the debt.
In another scenario, if you owe taxes in the city of Columbus, Ohio, a judgment lien may be placed on the piece of real estate. This means that the creditor (in this example, the tax authority) can seize the property until the debt is paid in full. Oftentimes, this can lead to foreclosure.
What Happens If You Inherit a House With a Lien?
When you are the responsible beneficiary of a property with an existing lien on it, there are a few things to keep in mind. The first is that the house will continue to have a lien until the debt is paid. This means that any due property taxes or assessments will still need to be paid, and any fines or penalties associated with the lien will also apply.
The second thing to remember is that if you sell the house before the debt is paid, you may have to pay back some of the money you made from the sale.
How Will it Affect your Financial Life?
Inheriting a house with a lien on it can have a major impact on your financial life. You may be responsible for the balance owed if the lien is not paid off. This can strain your finances and make it difficult to keep up with your mortgage payments.
If you are unable to pay the lien, the lender may foreclose on the property. This could damage your credit score and make it difficult to get approved for a loan to acquire new assets in the future.
What Happens If You Sell the House with a Tax Lien on It?
A few things need to happen to ensure the ownership of a property with a lien attached is transferred smoothly.
Paying More Property Taxes
When you sell the inherited home with a tax lien, you might be paying more in taxes than the house is worth. This can happen when the property is worth less than what you owe.
The Buyer Will Pay Off the Tax
The buyer will have to pay off the tax lien before closing the sale. If they fail to do so, they will not get the deed to the property and will not be able to sell it in the future.
Pay Back Taxes
Selling a property with a tax lien on it is risky because if you don’t get enough money from the sale, you will still have to pay back taxes on this property as well as interest charges.
How to Sell the Inherited Property with a Lien on It
The first thing many people wonder when family members leave them their home is, “how do I sell this thing quickly and easily?” There are a few routes to go, one being to contact a real estate agent and list the property for sale.
A real estate agent can help you to list the property and find a buyer. The agency can also help you negotiate with the lien holder to release the lien. In a perfect scenario, you are using the proceeds from the sale to pay off the lien.
Selling for Cash
What about selling for cash? Yes, you can absolutely sell the property for cash! However, it may involve a few extra steps, paperwork, and patience.
If you’re selling to a traditional buyer, they will likely need approval from the lien holder to sell the property. This can add some extra time and hassle to the sale. However, selling to a cash buyer is typically a much simpler process.
At Double Eagle Property Solutions, we make the process of selling your property quick and easy, even if there is a lien on it. We work with lien holders to get the necessary approvals to close the sale quickly. Contact us today to learn more!