You found out there’s a lien on your house. Maybe it’s a tax lien. Maybe it’s a contractor who wasn’t paid. Maybe it’s a judgment from a lawsuit you forgot about.
Your first thought: “I can’t sell this house.”
Actually, you can. It’s more complicated, but it’s doable. Here’s how it works in Tennessee.
What Is a Lien on a House?
A lien is a legal claim against your property. It means someone has a financial interest in your house until the debt is paid.
Liens attach to the property, not to you personally. When the property sells, the lien has to be satisfied. The buyer takes the property free and clear.
Common types of liens in Tennessee:
Mortgage lien. The most common. Your lender has a lien on the house until the mortgage is paid off. This is normal and expected.
Property tax lien. If you owe back property taxes, the county can place a lien on the house. These take priority over almost everything else.
IRS tax lien. If you owe federal taxes, the IRS can place a lien on your property. These are serious and complicate sales.
Mechanics lien. If a contractor, roofer, or plumber did work and wasn’t paid, they can file a lien against the property.
Judgment lien. If someone sued you and won, they can place a lien on your property to collect.
HOA lien. If you owe HOA dues, the association can lien the property.
Child support lien. Unpaid child support can result in a lien on your property.
How Does a Lien Affect Selling Your House?
When you sell a house, the title company runs a title search. This search reveals all liens. Before the sale can close, every lien must be paid off or resolved.
The proceeds from the sale are used to pay off the liens. You receive whatever is left after the liens and closing costs are settled.
If the house sells for $100,000 and there’s a $60,000 mortgage and a $10,000 tax lien, the mortgage gets paid ($60,000), the tax lien gets paid ($10,000), closing costs come out, and you get the rest.
What If the Lien Is Bigger Than the Equity?
If you owe more in liens than the house is worth, it gets harder. You might need a short sale, which means asking the lienholder to accept less than the full amount.
Some liens can be negotiated down. Old tax liens, especially, sometimes get settled for pennies on the dollar. But this takes time and negotiation.
This is also a situation where facing foreclosure might be a factor. If the mortgage is behind and there are additional liens, the situation can feel overwhelming.
How Can a Cash Buyer Help With a Lien?
A cash buyer who understands title issues can help in several ways:
We can work with the title company. We’ve dealt with complicated titles. We know how to navigate liens, judgments, and title defects.
We can close quickly once the lien is resolved. No waiting on buyer financing. Once the title is clear, we close.
We can sometimes help negotiate. If there’s an old tax lien or a mechanics lien that’s been sitting for years, we may be able to help negotiate it down.
We buy as-is. The condition of the house doesn’t matter. We factor everything into the offer, including the title situation.
What Should I Do First?
Get a title search. A title company can tell you exactly what’s on the property. You need to know what you’re dealing with before you can decide what to do.
Then send me the details. Tell me about the house and any liens you know about. I’ll look at the situation and tell you honestly whether I can help.
Sometimes the answer is a cash sale. Sometimes it’s a short sale. Sometimes it’s something else. But you won’t know until you ask.
Questions Answered in This Article
Can I sell my house if it has a lien on it?
Yes, but the lien must be paid off at or before closing. The title company will identify all liens during the title search. The proceeds from the sale are used to pay off the lien, and you receive whatever is left.
What types of liens can be on a house in Tennessee?
Mortgage liens, tax liens (property taxes or IRS), mechanics liens from contractors, judgment liens from lawsuits, HOA liens, and child support liens. All of these attach to the property and must be resolved before or at closing.
What if I owe more in liens than the house is worth?
You may need a short sale, which requires lender approval to accept less than the full amount owed. Some liens, like old tax liens, can sometimes be negotiated down. A cash buyer who understands title issues can help you navigate this.