Clear And Caring Counsel
Brock Zettle Legal Team

Can you sell your home if a contractor put a lien on it?

On Behalf of | Jun 12, 2024 | Residential Real Estate |

Some sellers know their home possesses a lien from a contractor, while others find out about it while their home is on the market. In any case, it is natural to worry that you cannot sell your property if it has a lien on it. However, you may still sell your home in spite of the lien.

Since you might have had repairs or improvements done to your residence at some point in the past, a contractor lien is probably no great surprise. What you should know going forward is how you can sell your home with the lien attached.

Satisfy the lien

A simple solution is to compensate the contractor to get the lien removed. Pay the contractor the outstanding balance, obtain a lien release, and provide this documentation during the sale. This can give buyers peace of mind knowing that your home is cleared of claims.

Negotiate the lien in the sale price

You might lack the funds to pay off the lien yourself. However, you may reap a large enough amount from the sale of your home that you can pay off your contractor and still have a substantial sum left over.

However, if you need the home proceeds for other expenses, you could increase the asking price to account for funds needed to resolve the lien. Make sure to disclose the lien to prospective buyers from the beginning, so they know what they are paying for.

The buyer may assume the lien

While it is not a common outcome for a home buyer to assume responsibility for a lien while buying a home, it is possible. Some buyers do not find a contractor lien to be a burden on their finances. However, this is a matter you should clear with a buyer in good faith before going forward with the transaction.

Check for lien expiration

Even if your home has a contractor lien, it is not a given that the lien remains active. If the lien has expired according to Texas law, you might not have to worry about the contractor having a claim to the property of your home.

Liens can complicate the sale of a home, but they do not always prevent a seller from completing a transaction. An exploration of the different options available could help you sell your property and find a way to resolve the lien.