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How do you sell a property with a judgment lien on it?

On Behalf of | Feb 11, 2022 | Real estate transactions

Your property – like many other residential properties in the country – has likely increased dramatically in value over the last couple of years. You are at the stage where you would be more content in an apartment or a condo, where someone else can handle the maintenance, and you would like to sell while the market is hot. 

The only problem is that there is a lien on your property from an old judgment against you that you never resolved. Can you still sell your property? Yes, but you still need to deal with that lien. 

You have options for resolving the lien so you can sell 

A lien does create some complications, but it’s not necessarily a death knell to your hopes for a sale. You just need to handle the lien first. 

Generally speaking, your options include: 

  • Dispute the lien. This could be successful if you think that it is invalid for some reason or has expired. In Arizona, a judgment lien lasts 10 years before it expires, so if your lien is very old, this might be the route to take.
  • Negotiate with the lien holder to see if they’ll take less. If the lien is related to an old debt, the creditor will probably take less than the full lien amount just to get something for their efforts. Offer what you can. If they accept, make sure you get a signed lien release in return so that you can clear your title before you sell.
  • Pay the lien in full. If you have the money available, paying the lien in full is the quickest and easiest way to move forward.
  • Use the equity in the home to pay the lien. This means being clear with your buyers about the existence of the lien and arranging for it to be paid off from the proceeds of the sale through your escrow company. 

Don’t let an old lien stop you from making the real estate deal of a lifetime. If you’re ready to sell, there are legal options available that can help you through the complications.