A lien on your property can feel like a roadblock to selling. But in most cases, you can still sell — the liens are simply paid off from the sale proceeds at closing. Here's how it works for different types of liens.
Types of Liens
Tax Liens
If you owe unpaid property taxes, the county or state can place a tax lien on your property. Tax liens take priority over most other liens and must be paid at closing. The good news: they're automatically paid from the sale proceeds by the title company.
Mortgage Liens
Your mortgage is technically a lien. When you sell, the mortgage is paid off from the proceeds. This is standard and happens in every home sale.
Mechanic's Liens
If a contractor did work on your property and wasn't paid, they can file a mechanic's lien. These liens must be resolved before or at closing — either by paying the contractor or negotiating a settlement.
HOA Liens
If you're behind on HOA dues, the HOA can place a lien on your property. Like other liens, these are paid from sale proceeds at closing.
How Selling with Liens Works
- Title company runs a title search and identifies all liens
- Lien payoff amounts are calculated
- At closing, liens are paid from sale proceeds in priority order
- Any remaining proceeds go to you, the seller
- Title company ensures all liens are satisfied before transferring title
What If Liens Exceed the Sale Price?
If the total liens exceed what the house can sell for, you may need to negotiate with lien holders for reduced payoffs, bring money to closing to cover the difference, or explore a short sale with your lender's approval.
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