There's a Lien on My Home. Can I Sell It Anyway?

Most homeowners have at least one type of debt or lien on their house: their mortgage. But there can be lots of other types like taxes, homeowners association fines, child support, and even unpaid contractor fees. When you take on these types of debt, you’re using your house as collateral, meaning if you don’t pay, the bank can take your home.

Just the fact that you have a lien, no matter how small, can make it almost impossible to sell your house. That’s because any time someone tries to buy a house, their lender will do a title search on it. When they do that they’ll find that there’s a lien on your house, and usually they’ll refuse to finance it until the lien is resolved.

Pay it off before you sell

If your lien is small, you might not even have known you had it. Try to take care of as much of it as possible before you put your house on the market. Once you pay it off, you’ll also need to make sure the lien is canceled, and that might take a couple months. You can also contact the lienholder and ask them to give you a Certificate of Release, which verifies you paid your debt. You’ll have to take that document to the right agency (which varies by state) to get it filed.

Add the lien to closing costs

If you’re not underwater on your mortgage and you have some equity built up, you can add your lien to the closing costs. Once the sale goes through, you’ll be able to use the money to pay off both your mortgage and your other lien.

The verdict? If you have a lien on your house, it is possible to sell it. But it’s not going to be easy. Your best bet is going to be to pay off the debt before you decide to sell the house.

Inspired to pay off your debt? You might not have thought of every way you could be saving. Check out our list of ways to save for a down payment and find that extra cash.