Residential real estate transactions can be very complex, and whether you are buying or selling a home, you will need to address a variety of legal issues and meet a number of requirements. As you prepare for your home closing, you may encounter obstacles that affect your ability to complete the transaction. One issue that may arise is the discovery of liens against a property, and these will need to be cleared before your closing date.

Understanding and Clearing Liens

A lien is an unpaid debt that is attached to a property. There are a variety of situations in which liens may exist, including:

• Mechanic’s liens - If a contractor or subcontractor was not fully paid for construction work done on a property, they may file this type of lien to recover the money they are owed.

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The coronavirus pandemic has had a massive impact on the economy of the United States, affecting both individuals and businesses. In many cases, job losses or requirements to close businesses or scale back operations have made it difficult or impossible for tenants to pay rent. This has put many landlords in a difficult position, especially since multiple states, including Illinois, have placed a moratorium on evictions. As landlords determine how they can recoup their investments in the property they own, they may be able to negotiate lease modifications with tenants. This can provide them with some protections and allow them to move forward with their business goals as the country continues to address the effects of COVID-19.

Rent Deferrals and Modifications to Lease Agreements

When tenants are struggling to pay rent, they may request concessions from a landlord that will decrease their financial obligations. These concessions may include the deferral of rent payments for a certain period of time or a temporary reduction in the amount to be paid. When negotiating a rent deferral, landlords will want to make sure both parties understand the amount of time that deferrals will last, how the deferred amount will be paid back, and whether interest will apply to the amount owed.

In return for making these types of concessions, landlords may make other modifications to a lease agreement, such as:

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There are many reasons why you may wish to move to a new home. You may be pursuing job opportunities in a new area, you may need more space for your growing family, or you may simply be looking to make a fresh start in a new community. While moving can be exciting, the process of selling your home can sometimes be lengthy and complicated, and you will want to understand the factors that can affect your ability to complete this transaction. Home inspections and appraisals can often have a significant impact on the purchase price of your home and the closing costs you will be required to pay, so you will want to be sure to understand the best way to approach these events.

Appraisals Vs. Inspections

An appraisal will determine the market value of your home, while an inspection will address its condition and identify any issues that may need to be repaired or addressed. An appraisal will typically be scheduled by the buyer’s mortgage lender, and if the appraised value of the home is lower than the offer made by the buyer, the buyer may attempt to renegotiate the price, or they may back out of the sale if contingencies in the purchase contract allow them to do so. Steps sellers can take to ensure that their home is appraised properly include making improvements and fixes to minor issues and ensuring that the property is clean and well-maintained.

A home inspection will be performed by the buyer, and an inspector will look for any problems that need to be repaired or other issues that the buyer may want to have addressed before they move in. In many cases, buyers will request that sellers perform repairs, and if there are major problems, contingencies in the purchase contract may allow the buyer to back out of the sale. Some issues that sellers may need to address include:

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Many people and families throughout the United States are struggling with debt, especially during the COVID-19 pandemic, which has resulted in the loss of jobs, reductions in the income that people are able to earn, and other financial difficulties. Homeowners who are struggling to pay ongoing expenses may be concerned about what will happen if they default on their mortgage, including whether they may face foreclosure. While some homeowners may be able to avoid foreclosure through a loan modification, others may find that they will be unable to avoid losing their home. In these cases, a short sale can sometimes be beneficial.

What Is a Short Sale?

A homeowner may owe more on their mortgage than their home is actually worth. If the homeowner is experiencing financial hardship, they may be able to sell their home at a fair price and avoid owing additional money to their mortgage lender. In many cases, a lender will need to approve a short sale, although it may be possible to complete a transaction without lender approval.

Short sales can provide multiple benefits to those who are unable to make mortgage payments, including:

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Debt is a major problem for many American families, especially during difficult times such as the COVID-19 pandemic. If you have lost your job, are facing large medical bills, or are struggling to make payments on the debts you owe, you may be concerned about the possibility of foreclosure on your home. Fortunately, bankruptcy may provide your family with some relief by allowing you to discharge or repay certain debts without losing your home.

Automatic Foreclosure Stay During Bankruptcy Proceedings

When you file for bankruptcy, an automatic stay will go into effect preventing creditors from attempting to collect on the debts you owe. This stay applies to mortgage lenders and foreclosure proceedings. If a bank has begun the process of foreclosing on your home, filing for bankruptcy can put a halt to these proceedings while you determine the best steps to take to regain financial security while keeping your home.

Chapter 7 or Chapter 13 Bankruptcy and Your Mortgage

A Chapter 7 bankruptcy is known as a “liquidation bankruptcy,” since all non-exempt assets you own will be sold to make payments to your creditors, and any remaining debts will be discharged. Chapter 7 bankruptcy can help you delay a foreclosure, but if you discharge the amount owed on your mortgage, in many cases the lender can still eventually foreclose on your home. However, if you do not discharge your mortgage debt, and you remain current on your mortgage payments, Chapter 7 bankruptcy may allow you to discharge other debts and give you the financial means to stay in your home.

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