in new jersey, can you sell a house with a lien against it and use the money to pay the lien?

House has a company-owned lien against it and is at risk of foreclosure. I want
to sell the house. Do I have to pay the lien first?

Asked on June 6, 2017 under Real Estate Law, New Jersey

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You can pay off the lien at the closing. This is done through the title company (more specifically its closing agent). This is part of distribution of sales proceeds. For example, you may have equity proceeds of $50,000. Out of those moniess, the loan balance, tax lien, and any other fees/obligations are deducted. At that point, you receive the remaining amount. Upon payment of the balance of the jugment, the lien against the property is removed. You then have clear title to pass to the buyer.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, the lien may be paid out of the proceeds of the sale, and in fact has to be paid *at the closing* from the sale price in order to transfer good or clean title to the seller. Indeed, that's the purpsoe of a lien: to secure payment either before or *at* the sale of the property. Speak to your realtor about this; the closing agent or company he or she uses should know the mechanics of how to go about doing this.


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