According to the National Association of Homebuilders, the annual rate for existing home sales in July 2016 alone was a whopping 5.57 million properties. Compare that to just 654,000 for new home sales and it’s clear to see that many Americans see the value and convenience that buying a preowned home offers.
That being said, there are a few wrinkles that can affect your purchase of an existing home: a property lien is one of the most troublesome. Basically, a lien is placed on a house if the owner has any outstanding obligations. As such, the owner cannot simply sell his or her house—the lien has to be cleared first.
Unfortunately, many buyers of existing homes forget to check whether a lien has been attached to a property, a crucial error that can lead to many delays on your home purchase. What liens should homebuyers watch out for?
Property Tax Liens
As they say, there are only two things certain in life: death and taxes. And homeowners must pay taxes on the property lest they have a lien placed on their home. What’s more, property tax liens take priority over all mortgages or liens on the home. Even if you’re itching to buy a home, the seller must settle his bills with Uncle Sam first.
Speaking of taxes, the Internal Revenue Service or IRS can also place a lien on the home if the current owner has not paid back taxes. This lien is often applied to homes owned by self-employed or sporadically employed individuals since they don’t have a regular paycheck that the IRS can garnish against.
The business of construction is an expensive one, and contractors often don’t get paid for their work or the materials used until they bill the client. As such, they can place a mechanic’s lien on property they work on as insurance that they’ll get paid. If the person you’re buying from recently undertook home improvement, make sure to check that the property has no mechanic’s lien placed on it. And if the lien has been satisfied, then it has to be removed from the property—which is something the contractor often forgets to do.
For a smoother, problem-free home purchase, make sure to work with a respected company that offers lien search on Miami properties. With their help, your dream of homeownership will come true sooner.
New and Existing Home Sales Reports, NAHB.com
Types of Property Liens, NOLO.com