When it comes time to sell a house in California, one of the biggest hurdles homeowners often face is discovering there’s a lien on the property. Whether it’s from unpaid taxes, contractor bills, or even child support, liens can make an already stressful situation feel overwhelming. If you’re already dealing with other title issues or even facing foreclosure, the thought of a lien can feel like one problem too many.
But here’s the good news: you can sell a house with liens in California—it just takes the right strategy, the right knowledge, and sometimes the right buyer. Let’s walk through what liens are, how they impact your home sale, and what options you have to move forward.
What Exactly Is a Lien?
A lien is a legal claim against your property that acts as collateral until a debt is paid. Think of it like a sticky note that says, “This homeowner owes money, and the house is on the hook until it’s cleared.”
Common types of liens in California include:
- Mortgage liens – placed by your lender until the mortgage is paid off.
- Tax liens – issued by the IRS or the state for unpaid income or property taxes.
- Mechanic’s liens – filed by contractors or subcontractors who weren’t paid for work done on the property.
- Judgment liens – created by a court after a creditor wins a lawsuit against you.
- Child support or spousal support liens – placed when court-ordered payments are overdue.
Example: We once worked with a homeowner in San Bernardino who didn’t realize a contractor had filed a mechanic’s lien after a remodel went sour. When she tried to sell, the title search revealed the lien, and the deal came to a screeching halt.
How Liens Affect Selling Your Home
A lien doesn’t just complicate the process—it can completely block a traditional sale. Here’s why:
- Title companies won’t insure the sale if there’s a lien. Without title insurance, most buyers and lenders won’t touch the property.
- Buyers don’t want someone else’s debt. Few people will agree to purchase a home knowing there’s money owed on it.
- Liens eat into your profits. Even if you sell, the lien has to be paid before you pocket anything.
If you’re dealing with liens, you may also run into other title issues that can delay or block your sale.
Options for Selling a House With Liens in California
Just because there’s a lien doesn’t mean you’re stuck. You have several paths to move forward, depending on your situation.
1. Pay Off the Lien Before Closing
The most straightforward way is to pay the debt in full before selling. At closing, the escrow company will cut a check directly to the lienholder using the sale proceeds.
Example: A homeowner in Riverside owed $18,000 in back property taxes. When we helped him sell, the escrow company used part of the buyer’s purchase funds to pay off the tax lien at closing, allowing the sale to go through.
2. Negotiate With the Lienholder
Sometimes lienholders are willing to settle for less than the full amount owed, especially if they believe they might not otherwise get paid. This is common with judgment liens or old contractor liens.
3. Use Sale Proceeds to Clear Liens
If you have equity in the property, liens can often be paid off during escrow. The lien gets cleared, and the buyer receives a clean title.
4. Short Sale (If You’re Underwater)
If you owe more on your mortgage plus liens than the home is worth, you might qualify for a short sale. With lender approval, the property can be sold for less than the debt owed, and liens may be negotiated down.
5. Sell to a Cash Buyer Willing to Handle Liens
Traditional buyers usually walk away from lien issues, but experienced real estate investors (like us at Mrs. Property Solutions) will often buy properties as-is with liens. We can work directly with lienholders, negotiate settlements, and close quickly.
Example: In Los Angeles, we bought a house with both a judgment lien and unpaid child support lien. The homeowner didn’t have the funds to clear it, but we negotiated with both lienholders, got the debts reduced, and closed in just 18 days.
What Happens If You Ignore the Lien?
Avoiding the problem won’t make it go away. If you ignore a lien, here’s what could happen:
- Foreclosure risk: Tax liens and mortgage liens can lead to foreclosure if unpaid.
- Credit damage: Liens show up on your credit report, making it harder to get loans.
- Legal action: Creditors can pursue further legal remedies if they’re not paid.
If foreclosure becomes a risk, check out our full guide on stopping foreclosure in California.
Steps to Take If You Want to Sell a House With Liens
If you’re serious about selling, here’s what to do:
- Run a title search early. This will uncover any liens you may not know about.
- Contact the lienholder. Ask for a payoff amount (including interest and fees).
- Decide how to clear the lien. Pay it, negotiate it, or use sale proceeds.
- Work with professionals. A good real estate attorney, escrow officer, or cash buyer can help you navigate the process.
Data: How Common Are Property Liens in California?
- According to the IRS, California ranks among the top states for tax lien filings.
- Roughly 1 in 5 homes nationwide has some form of title issue—most commonly unpaid liens.
- Mechanic’s liens are especially common in California due to the state’s strong protections for contractors.
This means if you’ve discovered a lien, you’re definitely not alone.
Final Thoughts
Yes—you can sell a house with liens in California, but the process depends on the type of lien, the amount owed, and your financial situation. Traditional sales usually require you to clear the lien first, but if that’s not possible, working with an experienced cash buyer can be a great solution.
At Mrs. Property Solutions, we specialize in helping homeowners sell houses with liens, no matter how messy the situation may look. We’ve worked with tax liens, judgment liens, and everything in between. If you’re feeling stuck, reach out—we’d love to walk you through your options and help you move forward.