What a lien is, and why it matters when you sell
A lien is a legal claim against a property for an unpaid debt. Buyers expect clear title, so liens are normally paid off or released at closing. The good news: the title company or closing attorney handles this for you. They find the liens, get the payoff amounts and pay them from the sale proceeds before you receive your share.
Common liens we see
- Property tax liens: unpaid county or city taxes, sometimes with penalties and interest.
- Mortgage and HELOC liens: first mortgages, second mortgages and home equity lines.
- Judgment liens: from a court judgment, such as old credit card or medical debt.
- Municipal and code liens: unpaid code fines, demolition or mowing charges, water and sewer bills.
- Mechanic's liens: filed by a contractor or supplier who wasn't paid.
- HOA liens: unpaid association dues and fees.
- Federal or state tax liens: for unpaid income taxes.
How a sale with liens works
- Tell us what you know. Even a rough list helps. You don't need exact numbers.
- Title search. The title company finds everything recorded against the property.
- Payoffs. They request current payoff amounts from each lienholder.
- We confirm the numbers work and show you your estimated net after liens.
- Closing. Liens are paid directly from the proceeds, releases are recorded, and the balance is wired to you.
What if the liens add up to more than the house is worth?
It happens, especially with old judgments or large code fines that keep growing. Some lienholders, including some municipalities and judgment creditors, will negotiate a reduced payoff to get paid now instead of waiting. Whether that's possible depends on the lienholder. Tell us early so we can look at it honestly. If we can't make it work, we'll say so.
Behind on property taxes?
Unpaid property taxes can eventually lead to a tax sale, and the timeline and redemption rules vary by state and county. If you've received a notice, don't wait. A sale can pay the taxes in full at closing and stop the clock. Our cash offer can close in as little as 15 days when title is otherwise clear.
For federal tax liens, bankruptcies or complex judgments, talk to an attorney or tax professional too. We work alongside them.