Selling a house is already a complex process, but when there are liens on the property, the situation becomes even more challenging. A lien is a legal claim placed on a property by a creditor, government entity, or contractor to secure a debt owed by the homeowner. In Milwaukee, liens can come from unpaid property taxes, overdue mortgage payments, contractor disputes, or court judgments.
Tax liens are one of the most common reasons homeowners struggle to sell their properties. In fact, property tax delinquency rates in Milwaukee have fluctuated between 5% and 10% in recent years, leading many homeowners to face legal and financial difficulties when trying to sell. Whether you’re dealing with a tax lien or a contractor dispute, understanding your options will help you take the right steps toward resolving the issue and completing your sale smoothly.
If you’re looking to sell your house with property liens in Milwaukee, it’s important to understand your options and the steps you can take to make the process as smooth as possible. In this blog post, we’ll cover everything you need to know about handling property liens when selling a house in Milwaukee.
1. Determine the Type of Lien
The first step to handling a lien is to determine what type of lien you’re dealing with. Each lien type has different legal and financial implications, which can affect how you resolve it. Understanding these distinctions can help you take the right steps to clear the lien before listing your home.
– Tax Liens: These are placed by the government when property taxes go unpaid. In Milwaukee, tax delinquency can lead to foreclosure through the Milwaukee County Treasurer’s Office. According to Wisconsin state law, a tax lien may result in the government auctioning off the property if the debt remains unpaid for a certain period.
– Mechanic’s (Contractor) Liens: Contractors, subcontractors, or suppliers can file a lien if they were not paid for work done on the property. Wisconsin law requires contractors to file a lien within six months of completing work and to enforce it within two years, or it may expire.
– Mortgage Liens: If a homeowner defaults on their mortgage payments, the lender places a lien on the property, which often leads to foreclosure proceedings. Some homeowners in Milwaukee opt for a short sale or loan modification to avoid foreclosure, but this depends on lender approval.
– Judgment Liens: If a homeowner loses a lawsuit and fails to pay the awarded amount, a judgment lien can be placed on their property. In Wisconsin, judgment liens last for 10 years but can be renewed if the debt remains unpaid.
Knowing the type of lien you’re dealing with will determine your next steps, whether it’s negotiating with the lienholder, disputing the claim, or paying it off before selling your home.
Each type of lien has its own set of rules and procedures that must be followed to resolve them, so it’s important to understand which type of lien you’re dealing with before moving forward. No matter which type of lien you are dealing with, you’ll want to resolve it before listing, or by utilizing the assistance of a professional property buyer such as Northwoods Property Resources.
2. Contact the Lien Holder
Once you’ve determined the type of lien you’re dealing with, the next step is to contact the lienholder to obtain a payoff statement, which outlines the total amount due, including interest and fees. Wisconsin law allows some flexibility in lien resolution, but the approach depends on the lienholder’s policies.
For tax liens, the Milwaukee County Treasurer’s Office may offer payment plans to help homeowners avoid foreclosure. In some cases, taxpayers can apply for a property tax deferment program if they meet specific financial hardship criteria.
For contractor liens, negotiating a lower settlement is often possible. Some contractors may accept partial payment to clear the lien, especially if legal enforcement would cost them more than a settlement. Always request a lien release in writing once an agreement is reached.
For judgment liens, you may be able to challenge the lien in court if you believe it was wrongfully placed. In some cases, filing for bankruptcy can eliminate certain types of liens, but this should be a last resort and requires consultation with a legal expert.
Seeking legal or financial advice before negotiating with a lienholder is highly recommended. A real estate attorney or title company can help you explore legal options and ensure all agreements are properly documented to prevent future claims against the property.
If you’re unable to negotiate a settlement, you may need to pay off the lien in full before you can sell your house. This can be a challenging situation, especially if you don’t have the funds available to pay off the lien. If can be frustrating for homeowners who need to sell a house right away, but are stuck because of the liens that have been put on their property.
3. Consider Selling to a Cash Home Buyer
If you’re unable to pay off the lien and don’t want to go through the hassle of negotiating a settlement, selling to a cash home buyer might be an option. Cash home buyers specialize in purchasing properties quickly, often making an offer within 24 hours and closing within a few weeks.
However, it’s important to weigh the pros and cons before deciding. While cash buyers can help homeowners avoid the delays of traditional sales, they typically offer below-market value. According to a 2023 study by ATTOM Data Solutions, homes sold to cash investors often go for 10-20% less than homes sold through a real estate agent. Additionally, not all cash buyers operate with the same level of transparency—some may impose hidden fees or have contingencies that could delay closing.
Before proceeding with a cash sale, research potential buyers thoroughly. Check their reviews, request proof of funds, and consult a real estate attorney to ensure you’re making an informed decision. Some reputable Milwaukee-based cash buyers will also work directly with lienholders to settle outstanding debts as part of the purchase agreement, which can be an advantage if you’re struggling to pay off the lien.
When you sell to a cash home buyer, you don’t have to worry about paying off any liens or making repairs to the property. The buyer will take care of everything for you, including debts, repairs, and even the clean up, allowing you to sell your house quickly and move on to your next adventure.
4. Work with a Real Estate Agent
If you’re not sure what to do when dealing with a lien, you may want to work with a real estate agent who has experience handling these types of situations. A real estate agent can help you navigate the process of selling your house with a lien and can provide guidance on negotiating a settlement or finding a cash home buyer.
When choosing a real estate agent, make sure to choose someone who has experience working with liens and who understands the local market in Milwaukee. This will ensure that you get the best possible outcome when selling your house. Keep in mind, that working with an agent can take considerably longer, and may require a hefty amount of cash out of pocket.
Selling a house with a lien can be a challenging process, but it’s not impossible. By understanding the type of lien you’re dealing with, contacting the lien holder, considering selling to a cash home buyer, and working with a real estate agent, you can successfully sell your house and move on to your next adventure.
If you’re looking to sell your house quickly in Milwaukee, consider selling to Northwoods Property Resources. We buy houses directly and can help with any difficult property or situation. If you have a lien on your property and need to sell if fast, our team can help. Contact us today to get started! (920) 851-9727
Disclaimer: The information provided in this article is for informational purposes only and should not be considered legal or financial advice. Property lien laws vary by state and situation, and consulting with a qualified real estate attorney, tax professional, or financial advisor is recommended before making any decisions regarding property liens and home sales.