Selling a home comes with its challenges, and discovering a lien on your property can feel overwhelming. The good news? You absolutely can sell a house with a lien — it just requires some extra steps and planning. Let’s walk through everything you need to know to successfully navigate this process.
Understanding property liens
A lien is a legal claim against your property by a creditor who is owed money. Common reasons for liens include:
- Unpaid property taxes
- Outstanding mortgage payments
- Unpaid contractor bills (mechanic’s lien)
- Court judgments
- Unpaid child support or alimony
Here’s the reassuring part: having a lien doesn’t prevent you from selling your home. You’ll simply need to address it during the sale process.
Can you sell a house with a lien?
Yes! You can successfully sell a house with a lien. The lien must be resolved during closing, typically paid from your sale proceeds. Most buyers and lenders require clear title, meaning all claims must be settled before ownership transfers. In some cases, cash buyers may even agree to purchase the property with the lien attached.
Types of property liens
Understanding your lien type helps you plan your next steps:
- Mortgage lien – The lender’s claim until your home loan is paid off
- Tax lien – Placed by government agencies for unpaid property or income taxes
- Mechanic’s lien – Filed by contractors or suppliers for unpaid work or materials
- Judgment lien – Results from court rulings allowing creditors to collect debts
- HOA lien – Imposed for unpaid homeowners association dues or fees
- Child support lien – Placed for delinquent court-ordered payments
- IRS or state tax lien – Specifically for unpaid federal or state income taxes
Most liens require resolution before you can transfer a clear title to your buyer.
How to sell a house with a lien: Step-by-step
1. Verify the lien
Request a title search or check county records to confirm all liens on your property.
2. Determine the amount owed
Contact the lienholder for the exact payoff amount, including any interest or fees.
3. Negotiate the lien
Many creditors will accept less than the full amount, especially if the property sale is their only path to payment.
4. Work with professionals
An experienced real estate agent or attorney can guide you through negotiations and ensure proper lien resolution.
5. Close the sale
The lien gets paid from your sale proceeds at closing before you receive remaining funds.
How liens are handled at closing
The title company identifies all liens during their search and calculates payoff amounts. These amounts are deducted from your sale proceeds before distribution. Lienholders receive direct payment, the lien is released, and your buyer receives clear ownership. It’s a straightforward process when handled by professionals.
Preventing title issues and closing delays
- Order a title search early – Know exactly what liens exist before listing your property
- Request payoff statements immediately – Get current amounts since interest and fees can change
- Resolve disputed liens before listing – Challenge invalid liens with an attorney well before closing
- Negotiate lien releases in advance – Settle smaller liens early to simplify closing
- Communicate with your title company – Keep them informed throughout the process
- Budget for payoffs – Ensure your sale price covers all liens plus closing costs
- Allow extra time – Build in additional days for lien payoff processing
The key to success is transparency and early action. Addressing liens months before closing prevents last-minute surprises that could delay your sale.
What happens if you don’t pay the lien?
Unresolved liens prevent you from transferring clear ownership. Most lenders will refuse to finance purchases with outstanding liens. In serious cases, unresolved liens can lead to foreclosure or legal action. The good news is that these outcomes are avoidable with proactive planning.
Removing a lien from your property
Step 1: Identify all liens – Obtain your property’s title report and list all liens with details
Step 2: Verify validity – Confirm each lien is legitimate and the amount is accurate
Step 3: Contact the lienholder – Request a payoff statement showing the exact amount due
Step 4: Negotiate if possible – Try settling for less than owed, especially for older debts
Step 5: Pay off the lien – Submit payment with proof, keeping all documentation
Step 6: Obtain lien release document – Get official paperwork stating the debt is paid
Step 7: Record the release – File the release document with your county recorder’s office
Step 8: Verify removal – Check county records to confirm the lien no longer appears
For disputed or invalid liens:
Gather evidence proving the lien is invalid, send a formal dispute letter via certified mail, and if necessary, file a lawsuit to quiet title with help from a real estate attorney. Once the court rules in your favor, record the court order to officially remove the lien.
Important notes: Mortgage liens are automatically removed when properties are sold and debts are paid at closing. Tax and judgment liens may have state-specific removal procedures. Always keep copies of lien release documents for your records.
Finding liens on a property before buying
Step 1: County recorder’s office – Search property records online or in person using the address or parcel number
Step 2: Check for tax liens – Contact the county tax assessor’s office to verify property tax status
Step 3: Search court records – Look for civil judgments at the county courthouse or their online database
Step 4: Contact local municipality – Ask about municipal liens for unpaid utilities or code violations
Step 5: Check with the HOA – Contact the homeowners association directly about any unpaid dues
Step 6: Order a preliminary title report – Work with a title company for a professional comprehensive search
Step 7: Hire a real estate attorney – Consider having an attorney review title search results
Step 8: Review your purchase agreement – Ensure your contract includes contingencies requiring clear title
Most buyers rely on the title company’s professional search, but doing preliminary research helps you make informed offers and avoid surprises.
Tips for selling a house with a lien
Act early – Address the lien before listing your home for smoother sailing
Get a payoff quote – Understand exactly what you owe to plan accordingly
Consider cash buyers – They often offer more flexibility with lien situations
Be transparent – Disclose liens upfront to build trust and avoid surprises
FAQs about selling a house with a lien
Can a lien be removed without paying?
Yes, in some cases. Liens filed in error or with expired statutes of limitations can be challenged and removed.
How long does it take to clear a lien?
The timeline depends on how quickly you arrange payment or negotiate with the lienholder. Early action speeds up the process.
Can I sell to a family member with a lien?
Absolutely, but the lien must still be cleared for proper title transfer.
Can I use my sale proceeds to pay the lien?
Yes, this is the most common approach. The lien amount is deducted from your proceeds during closing.
Selling a house with a lien: Your path forward
Can you sell a house with a lien? Absolutely! While it requires extra steps and careful planning, you can successfully close your sale and move forward. By verifying liens early, negotiating with creditors, and working with experienced professionals, you’ll navigate this process with confidence. Remember, liens are common and manageable — you’ve got this!
The post Can You Sell a House With a Lien on It? Here’s What You Should Know appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.
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