Can you sell a house with liens or back taxes?

A lien on your house, or property taxes you’ve fallen behind on, can make selling feel impossible. In most cases it isn’t. Here’s how it usually works.

What a lien is

A lien is a legal claim against a property for money owed. Common ones include:

• Mortgage and home equity loans
• Property tax liens from unpaid taxes
• Mechanic’s liens from contractors who weren’t paid
• Judgment liens from court cases
• Municipal liens for unpaid water, sewer or code fines

How liens are handled in a sale

When a house sells, a title company or closing attorney searches the title for liens. At closing, the money from the sale is used to pay off what’s owed. You receive what’s left.

That means you usually don’t need to pay off liens before you sell. The sale itself can clear them, as long as the price covers what’s owed.

When it gets harder

• The house is worth less than what’s owed. Then the sale may need the lienholder’s agreement to accept less, sometimes called a short sale.
• A lien is disputed or outdated. Some liens can be negotiated, or may no longer be valid. An attorney can tell you.
• Taxes have gone very far past due. Your county may have deadlines that matter. The county treasurer can tell you exactly what’s owed and when.

What to do first

1. Get a list of what’s owed and to whom. Your county and your lender are good starting points.
2. Ask the county about payment plans if you want to keep the house.
3. Gather any letters or notices you’ve received.
4. Talk to an attorney if a lien is in dispute or a deadline is close.

How it works with us

We’ll look at the numbers with you and be straight about your options. Liens and back taxes are usually paid from the sale at closing, through the title company, and our offer is honest about what’s owed. If selling to us doesn’t make sense, we’ll tell you and point you to other options.

Read more about selling with liens or behind on property taxes, or tell us about the house.