Whether it’s embarrassment or a messy home sale transaction you want to avoid, clearing up some title restrictions before a home sale can make both less problematic.
Home sellers may be asked to clear up any problems found in a title report before the sale proceeds. To prevent being surprised by a buyer’s request, sellers may want to initiate their own title search to find problems they can resolve early. Here are some common ones for sellers to clear up:
Tax Liens
If you haven’t paid your income taxes and the IRS is seeking money from you, you may have a tax lien from the IRS on your property. To remove it, you’ll have to pay your tax bill.
Unpaid Property Taxes
Your local tax assessor wants its money just as much as the IRS, so if your property taxes haven’t been paid, they’ll have to be paid before the sale of your property can go through.
Contractor Liens
Unpaid contractors who have done work on your home can file a lien against your property if the work they did wasn’t paid for. Once your bill is paid, the lien will be removed.
Judgments
Other people or agencies that you owe money to can also put a lien, called a judgment, against your property—these can’t be removed until the obligation is paid off. They must go to court and obtain a judgment. If that’s the case, then chances are you were alerted to this problem when it hit the court system. If you didn’t resolve it then, you’ll need to before your home sale is completed.
Identity Affidavit
If you have a common name—such as John Smith—then you may have judgments appearing under another John Smith that aren’t your problem. Still, they may be considered as belonging to you in a title review. They can become your problem until you resolve the issue by filling out an identity affidavit to verify that you’re a different person.
Resolving most of these title problems before a home sale closes can easily be done if you have enough money. Most involve unpaid bills— taxes, contractors and unpaid creditors—and can be taken care of by paying the debts before the buyer starts a title report.
