Trying to sell your house on the open market without any glaring issues can already be a major hassle. Trying to sell your house on the open market with a judgment lien attached can feel downright impossible. That’s especially true if you’re not even aware the lien exists until you start the process. Having a lien on your house can create a lot of questions and uncertainty but it doesn’t mean you’re out of options when you’re trying to sell your house locally. Let’s answer the question, “can I sell a house with a lien in Nebraska?”
How Do I Sell A House With A Lien In Nebraska?
First, What is a Lien?
Before getting into how to handle a judgment lien during a sale, it’s important to understand what it is. Liens can be summed up as someone else’s legal claim against a property. A judgment lien handed down by a court allows a person or organization to take property or take legal action against the property owner in order to satisfy any outstanding debts that the property owner has failed to pay.
Can Someone Put a Lien on My House in Nebraska?
A judgment lien can legally be attached to any debtor’s home or property in any state. That includes not only houses but also condos, land, or any other kind of real estate interest. While many other states allow for liens to be attached to other kinds of property, such as art or jewelry, a judgment lien in Nebraska can only be attached to real estate.
What Kind of Lienholders Are There?
Liens can come from two different types of situations. The first is a lender who, as part of a previous agreement, has financial rights to your property if you cease payments. The other kind is brought into existence by legal action based on outstanding debts. These most often come in the form of home loan lenders, material men (unpaid contractors or repairmen), HOAs (over unpaid dues), the Department of Revenue (over unpaid state taxes), or the IRS (over unpaid federal taxes).
How Does Someone Put a Judgment Lien on My Nebraska Home?
A judgment lien can be created on any property owned by the debtor in the Nebraska county where the judgment is entered. So if you live in Douglas County, the judgment has to be issued there as well. One the judgment is approved by a judge, the creditor can file it with the district court county clerk.
How Long Does a Lien Last in Nebraska?
A lien on a Nebraska property remains in effect for five years, which includes if the property changes ownership (which is what makes it difficult to sell on the open market). There are reasons that a creditor can’t just take away a house they have a lien on. Their ability to collect depends on certain factors, including the homestead exemption if the property is your primary residence. There are other factors, such as competing liens and any foreclosure or bankruptcy situations. If your property has multiple liens or is also tied up in foreclosure proceedings, you’ll want to speak with a bankruptcy and debt attorney for advice on how to proceed.
Lose the Lien (If You Can)
While it remains possible to sell a house with a lien, the best course of action is always to attempt to remove it or satisfy it beforehand if possible. The likelihood that a buyer on the open market is going to want to take over a house with a lien on it is small. And even if they do they are probably going to want significant concessions in order to take over ownership.
If you can afford to pay off the debt, do it. If you can’t, you can consider two options. One, negotiate with the lienholder to find a solution. Sometimes, even if you just pay a percentage of what’s owed they’ll remove the lien. They may also be open to a payment plan. The second option is that you can negotiate with a buyer to take over the lien. But as we mentioned, it’s extremely unlikely they’ll go for that.
If You Can’t, Use Home Sale for Repayment
If you can’t get rid of the lien and you don’t have the money to pay it off, you can proceed to sell the house knowing that the repayment of any liens will cut heavily into your profits. If you owe $100,000 on your mortgage and sell your house for $150,000, that would leave you with $50,000 (not including closing costs). However, if there was a $30,000 lien on the house when it sold, you would pay that off, leaving you with $20,000 in profit before closing costs. Of course, that’s assuming the sale price covers the amount of the lien owed. It’s very possible all of your profits could go towards satisfying the lien. And at that point, you’ve put a lot of hard work into selling your house for nothing in return.
Sell Your House As-Is
Dealing with liens can be a real deterrent when selling on the open market. While it’s possible to make a sale, the process can be complicated, stressful, and cut into your potential profits in a major way. If the buyer is amicable to the idea, there’s often still a lot of negotiation involved, not to mention legal and accounting fees. If you decide that going through with a home sale on the open market is just too much stress and hassle when it comes to liens, consider selling your house as-is to a real estate investor or buyer like Element Homebuyers.
They will often purchase your Nebraska property even if it has financial issues such as foreclosure or liens and then they will take over ownership themselves. They’ll make you a fair cash offer quickly and you can complete the transaction as quickly as you’d like. The lien is no longer your problem to worry about. Then you get to move on with cash in your pocket and a clean slate to make your next home purchase.