It is not uncommon to have to deal with selling property with a lien. The biggest problem with this process can be the need to suspend the sale while you are dealing with the lien, which can make a qualified buyer hesitate and walk away from the deal. Selling a home with a lien is best to entrust to companies that buy homes for cash and have relationships with banks and private lenders.
Types of selling property with a lien:
- Individuals selling on their own. If the borrower can no longer carry the debt, he has the right to sell the mortgaged property. However, finding a buyer who is willing to deal with the mortgaged property is not easy.
- With the lender involved. There is another option, a trilateral agreement involving the lender. This scheme is more reliable for the potential buyer. In the first case, the person who wants to buy the mortgaged property risks not having any money. There is a possibility that the seller will refuse to re-register the house after paying off the debt. Of course, the court is likely to side with the buyer. Except that it can take an indefinite amount of time to get back the cash you have already deposited.
Selling a mortgaged property is not an easy deal and both parties usually need professional help. This is one case where saving money is hardly justified.
The easiest way is to prepay the mortgage and then sell. The method is easy in terms of selling the house because it is easiest to sell a property that is not encumbered with anything. The difficulty is that you need to find some money to repay, and there are several aspects: if the amount is relatively small, you can ask friends and acquaintances. Or you can take out a consumer loan and repay it by selling the house.
Repayment of the credit by the buyer
If the bank denies the borrower in the sale of pledged real estate, you can apply another scheme. It involves repayment of the loan by the buyer to pay for the purchase of the real estate. The main difficulty is finding a client who will be ready to give an advance of the amount of your debt. The lower the loan balance, the better your chances of finding a buyer.
To secure the payer, the parties conclude a preliminary sales contract, in which they spell out the terms of the deal. The buyer pays off the loan for the owner of the house. This is reflected in the contract of sale in the form of advance payment or a deposit (which is harsher, as it implies a double refund if the transaction does not take place). After receiving the money, the bank sends an application to remove the encumbrance from the property and gives its consent to the transaction. The parties sign an agreement after which the seller receives the remaining amount.
Property price with a lien
The next task is to determine the sales price. The very fact that the house is encumbered by a lien does not affect its value: “The subject of mortgage is sold at market prices. To be guided by the cost of selling the house, the borrower can hire an independent appraiser, but he can also set any price on his own, given that homes are getting cheaper almost every day. The bank may not interfere in this process, it just enough price to pay the balance of the loan and accrued interest and commissions. Or it may not object to a lower price.
