Don't Lien on Me!

In the purchase of a home, a buyer should beware of these pesky things called liens (yes, pronounced like “lean”) that can pop up and make you responsible for someone else’s problem.

When someone does work on a home, they expect to get paid. When they don’t, they put a lien on the property, which basically says, “Even if we have to wait until this property is sold, we’re going to get our money.” These are called mechanics liens. Liens placed on a property because the materials for the work wasn’t paid are called materialman’s liens. Especially when you’re using financing to purchase a home, those existing liens need to be taken care of by the seller before or at closing. Your lender and title insurer will require it.

One of the most confusing parts of this is that these liens for work done on a house prior to your ownership can show up after your purchase if they don’t get filed prior to closing, but are still valid. You may, especially on new construction or on a house recently renovated, want to consider getting lien coverage on your title insurance during the closing process. Many title companies don’t even charge for this service, though it may slightly slow down the closing process.

For more information on purchasing your first home, visit our website at www.springfieldfirsthome.com or text or call 417.872.9222.