Can You Sell a House With a Lien on It? What Homeowners Need to Know

Posted On: 14 Jul, 2025
7 min read

A lien means that a borrower has offered a legal claim to their property as collateral for a loan they have taken out. This means the property’s possession will be transferred to the lender in the case that the borrower does not follow through with repayments.

There are a few different types of liens that a borrower could have. Two common examples include mortgage liens and tax liens. A home may also have liens such as mechanic’s liens from contractors or court-issued judgment liens. But can borrowers sell a property that has a lien on it? Borrowers technically can sell a home with a lien on it. However, there are some conditions they will need to fulfill

Key Takeaways

Can You Sell a House With a Lien?

The answer is technically yes. A property that has a lien on it is able to be sold. However, the lien on it will need to be resolved either before closing or during the closing process. This can make it more difficult to sell the home. Buyers and lenders will not proceed with the sale of the property until the title is clear in most cases. It is also harder to get financing for a home that has a pre-existing lien on it. These liens are usually found during the title searching process.

Types of Liens That Affect House Sales

Type of Lien	Lien Use
Mortgage Lien	Used for buying homes Voluntary The specific property being purchased is used for collateral
Property Tax Lien	Often “first-priority status” Legal claim Applied to a property to enforce the collection of unpaid property taxes
Judgment Lien	Involuntary court-ruling Applied to pay back debts to a creditor Can be applied to personal or real property
Contractor/Mechanic’s Lien	Involuntary Occurs when renovators or contractors are not paid for their work on a property
HOA Lien	Applied to a property after HOA fees are not paid Sometimes recorded by the county for public notice Possible foreclosure on the property in order to satisfy the debt

How to Sell a House With a Lien

There are a few different options for property owners to sell their properties that have liens attached to them.

Option 1: Pay Off the Lien Before Listing

The easiest solution is for the property owner to make sure that the lien is paid off before they attempt to sell the property. This solution helps the seller clear the title ahead of time and avoid any delays. It also makes the property more likely to attract interested buyers.

Option 2: Pay the Lien at Closing

Another option is to work with the real estate lawyer or closing agent and have them pay the balance of the lien after closing using money from the proceeds of the sale. This eliminates the need to pay off the debt before closing. It also means the buyer still gets a clear title and the lien will be satisfied for them when the transaction is finished.

Option 3: Negotiate or Settle the Lien

Negotiations for a smaller amount to be paid to settle the lien may be available. Some creditors may accept this in exchange for having the lien paid off earlier. These negotiations will need to be made with the assistance of an attorney and cooperation from the creditor.

Option 4: Sell “As-Is” With Lien Disclosure

There is also the option to sell the property with the lien still attached to it as-is. This would require the property to be marketed as an as-is sale with a lien on it. This pushes the responsibility of paying off the lien to the buyer and may make it harder to find interested buyers. However, this option may still have an appeal to investors or cash buyers—like Sell Soon Homes. We make competitive cash offers within 48 hours and buy these homes as-is on more flexible closing dates.

What Happens If You Try to Sell Without Resolving a Lien?

Trying to sell a home without resolving a pre-existing lien on it first is not advisable. It may cause several different complications.. There is the possibility that the sale of the property will fall through or the lender will decide not to accept the property because of the lien.

Title insurance also can not be issued until the liens on the property are all resolved. Some sellers may be forced to pay the remainder of their liens during closing. This amount is usually deducted from their proceeds. There may also be some more extreme repercussions of unpaid liens when the home is sold. This includes possible legal action that causes delays in the sale or lawsuits.

Should You Disclose a Lien to Buyers?

Most jurisdictions make it a legal requirement that all liens or title defects be disclosed to the buyer before the sale. They may be charged with a lengthy lawsuit if they fail to do so. This may also cause challenges for determining who the rightful owner of the property is.

How to Check If There’s a Lien on Your Property

There are some ways to check if there is a lien on a property for those who are unsure. Property owners can check with a title search company or a lawyer. They can find any liens on the property and identify where they came from. Users are charged for these services in most cases.

Liens are also publicly recorded. Some property owners may be able to find any liens on their home from searches within public records. This might include records from the county recorder’s office or other offices that contain local real estate records. Different municipalities may have online lien search tools available. Others may require an in-person check-in to access the information.

Another option is using other online search tools. These tools allow homeowners to enter their property address to access this information quickly. This option also usually comes with fees.

Conclusion

Property owners are able to sell their homes with liens on them. However, it adds a lot more complexity to the sale. It may also delay the sale or cause legal issues. Property owners should work with an experienced real estate lawyer or agent to identify any liens on their property before they decide to sell. Those with liens should also disclose this information to potential buyers and make sure they have a plan moving forward to have a smooth sales process.

Contact Sell Soon Homes today to sell your house as-is and for cash.

FAQs

1. Do liens have to be payed before closing?

Paying the lien before closing makes the home-selling process easier. However, this technically does not have to be done. It is also common to choose other options like resolving the lien during closing using the sale proceeds.

2. Is a lien the same as a mortgage?

A mortgage is considered to be a type of voluntary lien.

3. How are liens handled at closing?

Any outstanding liens typically need to be paid from the proceeds of the sale if they are not already resolved by the time of closing. Real estate lawyers or title companies may be there to make sure all legal claims are resolved before the transfer of ownership.

4. How to prepare for a sale of a house with a lien on it?

Property owners can start by checking for liens through a title search or public records. Then it is time to decide on the way they want to handle any liens they found. This may include paying them off or trying to negotiate lower liens. They may also choose to try to sell the property as-is.

5. Does a lien affect your credit score?

Liens that fall under the category of statutory are bad for borrowers’ credit and can stay listed on their credit for up to 7 years. Consensual liens do not have an impact on credit.

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