Can You Sell a House With Liens?
Last updated: June 2026
Max Cohen
Licensed General Contractor · FL Home Buyers
Quick Answer
Yes, you can sell a house with liens. The liens are paid off at closing from your sale proceeds. The title company handles the payoff process. If liens exceed your equity, we can discuss options like negotiating with lien holders.
Common Types of Liens
Property Tax Liens
Unpaid property taxes become liens automatically. Florida counties sell tax certificates annually at up to 18% interest. After 2 years, the certificate holder can apply for a tax deed, which means your property goes to auction.
Mechanic's Liens
Filed by contractors or suppliers who weren't paid for work on your property. Under FL Statute 713, contractors must send a Notice to Owner within 45 days of first work, and the lien must be filed within 90 days of last work performed.
HOA Liens
Unpaid homeowner association dues, fines, legal fees, and special assessments. In Florida, HOAs can foreclose independently of the mortgage holder, making these liens particularly aggressive.
Judgment Liens
Court judgments from lawsuits, credit card debt, or other legal matters. These attach to all real property you own in the county and are valid for 10 years, renewable for another 10.
IRS Federal Tax Liens
The IRS files a Notice of Federal Tax Lien in the county where your property is located. These take priority over most other liens except property taxes and can't be ignored at closing.
IRS Liens and the 120-Day Right of Redemption
IRS liens come with a wrinkle that most sellers don't know about. When a property with an IRS lien sells, the IRS has a 120-day right of redemption. That means they can buy the property back at the sale price within that window.
In practice, the IRS rarely exercises this right on residential properties. But it still has to be addressed before a title company can decide whether clear title insurance is available. The standard approach is to get an IRS payoff letter or a Certificate of Discharge before closing. This can take weeks, so it needs to be started early in the transaction.
How Title Companies Clear Liens at Closing
Title companies do the heavy lifting for clearing liens. Here's how the process works:
- 1. The title company orders a title search 2-4 weeks before closing, identifying every recorded lien, judgment, and encumbrance on the property
- 2. They contact each lien holder for current payoff amounts, which can change daily as interest and penalties accrue
- 3. At closing, all lien payoffs are deducted from the seller's proceeds on the settlement statement (HUD-1 or ALTA)
- 4. After closing, the title company files lien releases with the county clerk's office
- 5. Once all releases are recorded, they issue title insurance to the buyer
The seller doesn't have to contact lien holders directly. Everything runs through the title company and gets resolved at the closing table.
What If Liens Exceed Your Equity?
If you owe more in liens than the house is worth, you still have options:
- Negotiate with lien holders, many will accept 60-80 cents on the dollar for a quick payoff rather than wait years to collect the full amount
- Short sale, your mortgage lender agrees to accept less than what's owed so the sale can close
- Bring cash to closing, pay the difference out of pocket to clear all liens
- IRS installment agreement, if the IRS lien is the problem, they may agree to release their lien in exchange for a payment plan on the remaining balance
We work with title companies experienced in complex lien situations. We can review properties with stacked liens and coordinate payoff or negotiation steps with the title company. If you're unsure whether you can sell, call (561) 258-9405 for a free consultation.