Selling a home can be a complicated process. It can become even more difficult when you’re dealing with title issues.
Unresolved issues with the title of your home can cause a significant setback in the selling process. How do you resolve these issues quickly and effectively?
Check out this guide to learn how to resolve title issues when selling a home.
If your home serves as collateral or security against a debt or some other type of obligation, then it has a lien placed against it. The most common type of lien is a mortgage, but you may also receive a lien due to taxes or unpaid bills.
When a lien is in place, it gives the bank or whoever owns the lien the right to foreclose on your home if you don’t pay back your debts. Even if you have your mortgage bill and your taxes are all paid off, you still may not be in the clear when it comes to liens.
A lien may have been placed on the previous property owner, and if you didn’t check for a lien when purchasing your home, the burden might fall on you when you’re trying to resell. Luckily, liens are pretty easy to remove. You just need to make sure you do it before placing your home on the market to avoid any issues.
Here’s what you need to do to get rid of a lien:
Pay Off Your Debt
Paying off your debt is the simplest and most straightforward way to remove a lien. Once you start to pay off your debt, you should look into having the lien released for less than what you owe.
Run Out the Statute of Limitations
Each state has different laws when it comes to the statute of limitations on liens. In many states, the statute of limitations is ten years.
If you wait out your lien long enough, you don’t have to worry about dissolving it.
Fill Out a Release-of-Lien Form
Another simple option is to fill out a release-of-lien form. If the lienholder signs this form in front of a notary, the lien will be released once you turn the form into your local county recorder office.
Make a Claim With Your Insurance Company
If you bought title insurance when purchasing your property and the lien is invalid, then you should make a claim with your insurance company. Filing and processing a claim can take time, so make sure to do this as soon as possible.
Get a Court Order
Lastly, you can get a court order to remove the lien. Before you look into getting a court order, make sure the lien is invalid. If you’re able to prove that the lien is invalid, a judge can issue a court order to have it removed.
2. Public Record Issues
When recording details regarding the deed of your home, it’s possible that someone made a mistake. If your deed is missing information or there’s a clerical error, then you’ll need to fix it before selling your home.
To fix any errors, begin by heading to your public records clerk’s office. To resolve any issues, you’ll need to meet with the local clerk in-person. Bring official copies of the inaccurate documents with you to their office.
Also, make sure to bring along documentation that shows the correct information. Once you submit the correction, check the public records to ensure that your information is up to date.
3. Missing Heirs With Possible Property Claims
If the property owner passed away before selling their home to you, then ownership disputes may arise. Family members who weren’t around when the person died may come out of the woodwork to claim their inheritance or to contest the will.
Or, it’s possible that the owner’s will goes missing and gets discovered right before closing. If a missing heir pops up, your title insurance company will contact the Registrar of Wills to find out how the property was supposed to be passed down.
If the missing heir proves to be legitimate, then they could pursue you for financial compensation or their portion of the property. If you have title insurance and you’re forced to go to court, then your insurance company will provide you with money for your legal bills.
Additionally, your insurance will pay out any compensation you’re required to give the missing heir.
4. Illegal Deeds or Forgeries
There’s also a chance that the previous homeowner documented the title illegally. For example, the deed is illegal if it includes a minor, an undocumented immigrant, a person who is single but claims to be married, or a person of unsound mind.
If you find out that the previous owner documented an illegal deed, then you should get a hold of a real estate attorney. Your attorney can help you obtain what’s known as a “quiet title”.
This title will clear any deeds that were fraudulently or improperly recorded. To obtain a quiet title, you’ll need to gather your mortgage documents, original deed, insurance policies, and any other relevant materials.
Your real estate attorney can also help you sell your home for cash. Click here to learn more about “we buy houses for cash“.
Time to Resolve Your Title Issues
Now that you’ve read this guide, it’s time to resolve your title issues. Once you’ve taken care of these title issues, you’ll be in the clear to sell your home!
Be sure to check back in with our blog for more guides on how to navigate the home selling process.