Selling a house with liens or judgments against it

A lien is a legal claim against a property, and a title company won't close a sale until each one is dealt with. That sounds like a roadblock, but in many sales the liens are simply paid from the proceeds at closing.

Common liens on a house

Mortgage or deed of trust. The loan secured by the property, paid off at closing.
Property tax liens. Unpaid county property taxes. See our page on selling with back taxes.
Judgment liens. Created when a creditor wins a court judgment against an owner and records it against the property.
Federal or state tax liens. Unpaid income or payroll taxes can attach to real estate.
Mechanic's liens. Filed by contractors or suppliers who say they weren't paid for work on the home.
HOA liens. Unpaid association assessments, fines, or fees.
Code enforcement liens. Costs a city or county adds to a property after a violation. See code violations.

How liens are handled in a sale

The title company runs a title search to find every recorded claim, then asks each lienholder for a payoff amount. Those payoffs come out of the sale proceeds at closing. If the sale price covers them, you don't have to bring money to the table. If it doesn't, there are still options, such as negotiating with a lienholder or bringing funds to close, and an attorney can help you weigh them.

Negotiating with lienholders

Some lienholders will accept less than the full amount, especially when the alternative is waiting or collecting nothing. That depends on the type of lien and the lender, and it isn't guaranteed. If your numbers are tight, tell us up front so we can look at them together.

Check before you decide

Pull a recent title report, or ask us to help you find out what's recorded against the property.
List every lien, who holds it, and the payoff amount.
Compare the total to what the house could realistically sell for, so you know what you'd net.

If the liens leave you with little or nothing either way, an attorney or a HUD-approved housing counselor can talk through alternatives. We'll give you an honest view of whether a cash sale helps.

Common questions

Do I need to pay off liens before I sell?

Not usually. In most sales the title company pays them from the proceeds at closing.

What if the liens are more than the house is worth?

Then a standard sale may not cover them. A lienholder may negotiate, or you may have other options. An attorney can advise on your situation.

Other situations

Where we buy

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