Dealing with Property Liens: What Buyers and Sellers Should Know

29 May 2025

So, you’ve finally found the perfect house. You’re already picturing yourself sipping coffee on the front porch, watching the world go by. But wait—what’s that lurking in the shadows? Oh, just a little something called a property lien. Sounds ominous, right? Well, it kind of is.

Whether you’re buying or selling real estate, property liens can cause more headaches than a toddler on a sugar high. But don’t panic just yet! We’re breaking down everything you need to know about property liens—what they are, how they affect the buying and selling process, and most importantly, how to deal with them without losing your sanity.

What Is a Property Lien? (And Why Should You Care?)

A property lien is like that annoying relative who just won’t leave your house. It’s a legal claim against a property, usually because the owner owes money to someone—like a bank, contractor, or even the government. Until that debt is paid off, the lien sticks to the property like gum on a shoe.

Why should you care? Well, if you're a buyer, purchasing a property with a lien attached is like inheriting someone's old problems—you buy the house, you buy the debt. If you’re a seller, liens can throw a massive wrench into your plans, making it nearly impossible to finalize a sale.

Different Types of Property Liens (Because One Just Isn't Enough)

Oh yes, because real estate wasn't complicated enough, there are different types of property liens. Here’s a quick rundown:

1. Tax Liens

The government doesn't play around when it comes to taxes. Fail to pay your property taxes, and Uncle Sam will slap a lien on your home faster than you can say “IRS.”

2. Mortgage Liens

You know that mortgage you took out? Yeah, that’s technically a lien. The lender holds the rights to your property until you finish paying off your loan.

3. Mechanic’s Liens

Did you skip out on paying a contractor after they remodeled your kitchen? Well, guess what—they can place a lien on your property, ensuring they get their money.

4. Judgment Liens

Lost a lawsuit and owe someone money? That unpaid debt can turn into a judgment lien on your property. Because nothing says "I lost in court" quite like a legal claim on your home.

How Property Liens Affect Buyers

So you're in the market for a new home. But before you start celebrating with champagne, let's talk about why property liens are a buyer’s worst nightmare.

1. Surprise! You Bought a Debt

If you unknowingly purchase a property with a lien, the debt becomes your problem. Yep, that’s right. Congratulations, you just bought a house AND someone else’s financial burdens.

2. Financing Can Get Tricky

Banks don’t like messy financial situations. If a property has a lien, your mortgage lender might reject your loan faster than a bad Tinder date.

3. Delays, Delays, and More Delays

Even if you’re willing to deal with a lien, closing on a property with one can take forever. The seller has to resolve the lien, which could mean months (or longer) of waiting.

How Property Liens Affect Sellers

Trying to sell a property with a lien attached? Prepare for an uphill battle.

1. Good Luck Finding a Buyer

Most buyers (understandably) don’t want to deal with a property that has a legal claim against it. Even if they’re interested, they may struggle to secure a mortgage.

2. Your Sale Could Be Blocked

In many cases, you can’t sell your home unless the lien is cleared up. So unless you enjoy holding onto real estate you don’t want, you'll have to deal with the lien first.

3. Lower Offers & Negotiation Nightmares

Buyers who do consider purchasing a property with a lien usually lowball their offers, knowing they’ll have to deal with the legal mess. Either that, or you’ll end up negotiating like a hostage in a bad action movie.

How to Find Out If a Property Has a Lien (Because Surprises Should Be Fun, Not Expensive)

No one likes being blindsided by a property lien, so before you fall in love with a home, do your homework. Here’s how:

1. Check Public Records

Most property liens are public record. A quick search at the county recorder’s office (or their website) can reveal whether a house is carrying some financial baggage.

2. Hire a Title Company

If you’d rather not dig through legal documents yourself (because let’s be honest, who does?), hiring a title company can save you a lot of stress. They’ll conduct a title search and ensure the property is clean.

3. Ask the Seller (But Don’t Expect a Straight Answer)

Some sellers might be upfront about liens, but others… not so much. If you’re serious about buying, ask the seller directly and make sure you get everything in writing.

How to Remove a Property Lien (Because No One Likes Clingy Debt)

If you’re a seller struggling with a property lien, don’t lose hope just yet—there are ways to get rid of it.

1. Pay Off the Debt

The easiest (but least fun) way to remove a lien? Pay what you owe. Simple as that.

2. Negotiate a Settlement

If you can’t afford to pay the full amount, try negotiating with the creditor. They might accept a partial payment just to settle the issue.

3. Challenge the Lien in Court

Think the lien is bogus? You can take legal action to dispute it. Just be prepared for lawyer fees and court dates.

4. Get a Lien Release Letter

Once the lien is resolved, ensure you get a lien release letter from the creditor. Without it, the lien could still cause problems down the line.

Can You Buy a House with a Lien? (Technically, Yes—But Should You?)

Technically, yes, you can buy a house with a lien. But should you? That’s another story.

Unless you're getting a major discount and know how to navigate legal messes, buying a property with a lien isn’t for the faint of heart. At the very least, you’ll want:

- A real estate attorney to help you understand the risks.
- A title insurance policy (just in case).
- A strong stomach for dealing with paperwork, delays, and potential financial headaches.

Final Thoughts: Property Liens Don’t Have to Ruin Your Real Estate Dreams

Look, no one wants to deal with property liens. They’re annoying, complicated, and can throw a wrench in your home-buying or selling plans. But that doesn’t mean all hope is lost!

Buyers—do your homework before you get attached to a house. Sellers—clear up your liens before listing your property. With the right knowledge (and the right professionals in your corner), you can navigate the world of property liens without losing your mind.

And who knows? Maybe one day, you’ll actually get to enjoy that coffee on your new front porch—without a surprise lien lurking in the background.