Real Estate

Can You Sell a House With a Lien on It?

By Tom Burchnell
Can You Sell a House With a Lien on It

If you want to sell your house, but it has a lien, you may wonder, “Can you sell a house with a lien on it?” Read on to find out.

When you’re considering selling your home, it’s already a difficult decision with many pros and cons. If your house has a lien on it, you may feel even more confused about your options. Liens can be placed on a property for various reasons, but they all have one thing in common: they make it more difficult—but not impossible—to sell the property. 

So to answer, “Can you sell a house with a lien on it?” Yes. But it may be more complicated than a traditional sale.

If you’re in this position, keep reading. We’ll cover everything you need to know about selling a house with a property lien so you can make an informed decision. 

What Is a Lien?

Before you explore selling your home with a lien, it’s important that you fully understand what a lien is. Essentially, a lien is a claim on a piece of property or an asset that is placed by a creditor as collateral against a debt. 

A few key facts to understand about liens include:

  • Liens may be the result of unpaid taxes, legal action, or voluntarily assumed by the property owner as collateral for a loan.1
  • The creditor may be able to seize the property or asset if the debtor fails to pay back their unpaid debt.2
  • Debts like credit card bills, medical bills, and personal loans can’t cause a lien to be placed on your property without the creditor filing and winning a lawsuit.2
  • Other debts, like tax bills, can result in a lien on your personal property without a lawsuit being filed.2

Common Types of Property Liens

Although there are quite a few kinds of liens, they all fall into two basic categories:2

  • Voluntary liens – These are liens placed on a property when the owner agrees to use it as collateral for a loan. Although it’s not usually thought of as a lien, a mortgage is a type of voluntary lien. Hopefully, you’ll never have to find out what happens if you can’t pay your mortgage, but a mortgage lien gives the lender the right to foreclose on the property if the borrower fails to make their payments. 
  • Involuntary liens – Involuntary liens are placed on a property by creditors. This could be the consequence of an unpaid income or property tax bill.3 Other involuntary liens can result from legal judgments due to outstanding debts like child support, HOA dues, money owed to a contractor, and so on.
  • Judgment liens – A judgment lien is a court order that grants a creditor the right to seize a debtor’s property if the debtor doesn’t carry out the terms of the agreement.

Is It Possible to Sell a House With a Lien on It?

While it’s possible to sell a house with a property lien on it, it is a bit more complicated than just popping that “For Sale” sign in your yard. You’ll need to start by going through the following process:

  • First, determine who has placed the lien and how much is owed.
  • Next, take into account any amount you currently owe on your mortgage.
  • Finally, get an estimate of your home’s current market value by contacting a local realtor.

Once you have this information in hand, you can work on a plan to proceed. Either way, you’ll need to contact the lienholder and come to an agreement. 

How to Sell a House With a Lien on It

Because the lienholder has a legal claim on part of the value of your home, you can’t proceed with selling until you have notified your creditor and come to an agreement.2

Possible terms you may arrange with the lienholder include:

  • Short sale – This is when you sell the property for less than the amount of the lien. In order to do this, you will need to get the lender’s approval. This can be difficult to obtain, and it is not always guaranteed. 
  • Paying off the lien – The other option is to pay off the lien in full before you sell the property. This will allow you to sell the property without the lender’s approval, but it will require you to have the funds available. If the amount is relatively small, you may be able to pay it off using the proceeds from the sale of the property, but the lender needs to agree to let the sale proceed. 
  • Sell with the lien – If you’re unable to negotiate a settlement with the lienholder, you may still be able to sell the property. However, you’ll need to find a buyer willing to assume the lien. This can be tricky, as most buyers want to avoid the extra complications, and lenders are less willing to finance in these circumstances.4

Selling a house for cash with a lien on it can be challenging, as you must agree with the lienholder on the terms of the sale or a payment plan. Therefore, you may wish to contact a knowledgeable financial advisor, real estate attorney, or real estate agent for advice on negotiating the agreement.

Keep Your Options Open With a Sale-Leaseback

Other options, such as a sale-leaseback program, can be an excellent home equity loan alternative for homeowners who need greater financial freedom but want to retain the security of staying in their homes. With a sale-leaseback, you can sell your house to pay off debt and still live in it by renting it back.

Do you have bad credit? Was your HELOC declined? A sale-leaseback may be a good option for you.

Key Takeaways

Here’s the bottom line: can you sell a house with a lien on it? Yes. Should you? That’s a more complicated question. With an outstanding debt on your home, a traditional home sale on the open market may not be the best solution for you. Talk to a financial advisor to learn more about your options.


  1. Investopedia. Lien. 
  2. Nolo. Types of Property Liens. 
  3. Internal Revenue Service. Understanding a Federal Tax Lien. 
  4. Investopedia. Is It Bad to Have a Lien on Your House? 
Tom Burchnell
Written by Tom Burchnell
Director of Product Marketing

This article is published for educational and informational purposes only. This article is not offered as advice and should not be relied on as such. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process. EasyKnock is not a debt collector, a collection agency, nor a credit counseling service company.