Selling a home can be stressful enough—but when there’s a lien or unpaid tax debt attached to the property, it gets more complicated. That doesn’t mean it’s impossible. With the right strategy, guidance, and a solid understanding of your options, you can navigate this and still walk away with a successful sale.
First, let’s clarify what a lien is. A lien is a legal claim against a property due to unpaid debt—this can come from back taxes, contractor work, a court judgment, or even unpaid HOA dues. It essentially clouds the title, meaning it can’t be transferred cleanly to a buyer until that lien is resolved. And most buyers—and lenders—won’t touch a home with a cloudy title.
So, how do you sell a home with a lien or tax debt? You’ve got options:
- Pay Off the Lien – The simplest and cleanest option is to pay it off before closing. If the equity is there, it can be paid at closing directly from the sale proceeds.
- Negotiate the Debt – In some cases, creditors may accept a reduced payoff—especially if they know the home is being sold. A real estate attorney or experienced agent can help with negotiations.
- Use a Short Sale – If your home is worth less than what’s owed, and there’s tax debt or other liens, you may qualify for a short sale. It’s a longer process and requires lender approval, but it’s an option.
- Work With a Title Company Early – They’ll run a title search and uncover all liens—known and unknown—so you’re not blindsided during closing.
- Disclose Everything – Transparency is your friend. Trying to hide a lien will only delay or derail the transaction later.
The key? Don’t panic. A lien doesn’t mean a dead end—it means you need a knowledgeable real estate team (that’s us!) to walk with you every step of the way, negotiate where needed, and communicate clearly with all parties involved.
Got questions? We’ve handled situations like this before—and we’re here to help.
The Paul Smith Team has expertly helped hundreds of clients successfully sell and/or buy their homes. Whether you need a Listing Specialist or Buyer’s Agent our team can help make the process smooth, predictable, and trusted every step of the way!
If you would like to receive more detailed information about buying and/or selling a home, give our team a call or send our team an email with your information with the Subject Line “Buying and/or Selling A Home” and we will be happy to help!
You can reach us at 843.606.0234 and/or home@thepaulsmithteam.com.