To sell your property, your title must be “clear.” Essentially, this means there are no liens, unpaid taxes, judgments, or easements against the property and the title has changed hands correctly over the years. There is no dispute as to who the owner is and no one but the seller is listed as the owner. If you’ve got liens or levies against your home, you’ll need to clear those up before you can successfully put it on the market. If you’re a buyer, performing a diligent title search is a necessary part of the process.
You’ll most likely have a title company perform the title search. They are the experts at identifying issues. Once you know what the issues are, you can handle them one by one. If you’re selling your home and concerned about the title, you can perform your own title search before putting the home on the market.
What are liens?
Having a lien against a property is one of the most common problems on titles. It’s a notice attached to property saying that the owner owes someone money. Placing a lien on a property is a way for a creditor to collect its money. They are placing some “ownership” over the property until the debt is paid. Liens are public records for anyone to see.
Types of liens include:
- Property tax liens—for unpaid property taxes.
- IRS tax liens—for unpaid income taxes and other types of unpaid taxes.
- Contractor/mechanic liens—contractors can put a lien on a house before they start work. Sometimes, they fail to clear up the lien once the work is completed. It can also mean the owner owes a contracting company money.
- Mortgage liens—for unpaid mortgage payments.
- Judgment, child support, and alimony liens—for unpaid legal settlements or verdicts (say you lost a car accident case and owe the plaintiff money), child support, and alimony.
The best way to clear up a lien is to pay the debt in full. If these issues are not resolved before the sale, these debts become the new homeowner’s responsibility.
A lien isn’t always the only title problem. In other cases, a relative inherited a property and the title wasn’t transferred properly. It may take the seller some time to resolve, thus ensuring they are legally able to sell the home.
Top real estate agents in and around Bodega Bay
Buying or selling a home in beautiful Bodega Bay is easy if you have the right professionals on your side. Dennis and Kathleen Erba have been local homeowners in Bodega Bay since 1994 and have been selling real estate exclusively on the Sonoma Coast since 2000. We love the area and love making your real estate dreams a reality. Call us today at (707) 484-9857 to learn how we can help.