Selling Your House with Liens: What You Need to Know

Written by Posted On Thursday, 25 April 2024 08:09

If you're a homeowner with liens on your house, you may be wondering whether you need to pay off those liens before selling. Liens can arise from a number of different situations, including property taxes, mortgages, judgments, and other debts. Fortunately, the answer is no – you don't have to pay off liens before selling your house. In this article, we'll explore how liens affect the selling process and explain how they're handled when selling your house.

Understanding Liens:

Before delving into the selling process, it's important to understand what liens are and how they can impact your property. A lien is a legal claim or encumbrance placed on a property by a creditor to secure the repayment of a debt. Liens can arise for various reasons, including unpaid property taxes, outstanding mortgage balances, unpaid contractors or suppliers, or court judgments against the property owner. A mortgage is the most common example. When you buy a house and get a loan from a bank, the put a mortgage on the property. The mortgage is recorded and attached tot he property so you can't sell the property without paying the bank bank what you owe them. The mortgage is a lien used to secure the repayment of a debt.

Selling Your House with Liens:

When it comes time to sell your house, having liens on the property can complicate the process. However, it's essential to understand that you don't need to pay off liens before selling. Instead, the liens will be addressed during the closing process, with the assistance of a title attorney or closing agent. Some liens can also be negotiated. At NOLA Buy Houses we always do our best to negotiate the best possible deal for liens when the situation arises. We are always trying to get the most money into YOUR pocket.

How Liens Are Handled During the Sale:

When you sell your house, the title attorney or closing agent will conduct a title search to identify any liens or encumbrances on the property. This process ensures that the title is clear and marketable, meaning there are no outstanding claims or legal issues that could affect the sale.

Once the liens are identified, the title attorney will work to satisfy them using the proceeds from the sale. This typically involves paying off the liens in full, either through direct payment to the lienholders or through an escrow arrangement. The funds to pay off the liens are deducted from the sale proceeds, and the remaining balance is distributed to the seller. Again, if there is a possibility of negotiating we will step in and assist here. Creditors will rarely negotiate with the debtor, the homeowner, but they will negotiate with a 3rd party. No, we don't know why!

The In's and Out's of Selling with Liens:

Selling your house with liens can offer several advantages:

  1. No Upfront Costs: You don't have to come up with the money to pay off the liens before selling. The liens will be satisfied using the proceeds from the sale, so you won't have to worry about covering the costs out of pocket.
  2. Efficient Process: Handling liens during the closing process can streamline the selling process and ensure a smooth transaction. The title attorney or closing agent will work to resolve any outstanding issues, allowing you to sell your house with confidence. Sometimes sellers want to pay the liens themselves prior to a closing. This can actually complicate and delay the selling process. It will take a while for the payment to be processed and the release ro be recorded. The title attorney won't be able to pass the act of sale with clear title until it is recorded.
  3. Clear Title: By addressing liens during the sale, you can ensure that the title to your property is clear and marketable. By allowing the title attorney to pay the lien out of the sale proceeds, they can insure the clear title because they themselves are handling the payoff.


If you have liens on your house, you may be concerned about how they will impact the selling process. However, rest assured that you don't have to pay off liens before selling. The liens will be addressed during the closing process, with the assistance of a title attorney or closing agent. By selling your house with liens, you can avoid upfront costs, streamline the process, and ensure a clear title for the buyer. If you're ready to sell your house, contact us today to learn more about how we can help you navigate the selling process with liens.

If you're considering selling your house in the New Orleans area, selling as-is may be the right choice for you. Call NOLA Buys Houses today at 504 264 1407 or go to our website to find out more about us and our process. We can give you a cash offer on your home in 24 hours and there is never any obligation to work with us. We are on call 24/7 and are here to help!

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Carl Fanaro

We are a professional house buying company that has been in business for over 20 years. We buy houses fast with cash all over the greater New Orleans area

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