A federal tax lien is a legal claim by the government against your property when a tax debt has not been paid. This allows the government to protect their interest in your property, financial assets, personal property, and real estate. A Notice of Federal Tax Lien will be filed after your balance due is put on the books, you are sent a bill that explains the amount owed, and you refuse or neglect to pay the required amount on time.
How Do You Get Rid of a Lien?
The best way to get rid of a tax lien is simply to pay the debt in full. Once the debt has been repaid, the government will release the lien within 30 days. There are a few other ways the lien can be removed, including the discharge of property, subordination, or withdrawal. The government also has the right to foreclose on a property with a tax lien. The government will force the sale of the home and use the money made by the sale to pay off the tax lien.
Selling a Home With a Tax Lien
If you are unable to get rid of the tax lien and would like to sell your home to avoid foreclosure, there are options. According to the IRS, you can sell or refinance your house with a federal tax lien on your home; however, that lien must be satisfied before the home can be sold or refinanced. If you have equity in your property, the tax lien can be paid from the sale’s proceeds when closing takes place. If there is not enough equity and the home is being sold for a smaller amount than the lien, you can ask the IRS to discharge the lien so that the sale can be completed. If you have a desirable home, it may be possible to make a home sale where the buyer agrees to absorb the tax lien.
What Does a Tax Lien Mean to a Potential Buyer?
It will be difficult to sell a home with a tax lien, especially to a traditional buyer seeking a mortgage. This is because mortgage lenders are cautious and are unlikely to agree to terms when there is a lien on the property. The best bet to selling a home with a federal tax lien is to sell to a cash buyer. Cash buyers can decide to absorb the lien and be responsible for paying it back. Cash buyers must keep in mind that the amount due will include the lien as well as penalties and interest. These costs should be taken into account in the offer extended. If the lien is not repaid, the new owner can be at risk of foreclosure.
How Can I Find a Cash Buyer?
One of the easiest ways to sell your home to a cash buyer is to contact a company like We Buy Houses Columbus. We offer a simple process to help you sell your house fast for cash. We have an experienced team that can help you navigate all your options. We often work with homeowners who are facing foreclosure or have fallen behind on their mortgage. After gathering information about you and your property, we can let you know if we will be able to extend an offer to you for your home. If we can, we have a streamlined system in place to complete the sale quickly. We will not ask you to make any repairs to the property, and you will not need to pay any fees or closing costs. If you are facing a tax lien on your property, get in touch with us at We Buy Houses Columbus by filling out the form on our website or by calling us at 614-699-6464. We would be happy to learn more about your situation and see if we can help.