Can You Sell a Home With Property Taxes Owed on It?

In Blog by Alexis Assemat

Can You Sell a Home With Property Taxes Owed on It?

Can You Sell a Home With Property Taxes Owed on It?

The short answer here is yes, you can sell your home with property taxes owed on it. There are many options to sell your property when you are behind on the taxes owed on it, but it can be complicated depending on your cash flow. Fortunately, we are here to help you understand the process and the best way to proceed – from a traditional sale to a quick cash sale.

What Happens When Your Taxes Are Delinquent?

First thing is first – if you want to sell your home with property taxes on it, you must first pay the taxes that you owe before the sale can close. Whether you take care of the debt before you list and sell or use the methods below, the amount owed must be cleared.

If you sell your house and the proceeds still do not cover the amount of taxes owed, the process gets more complicated. 

Typically, homeowners pay property taxes twice per year. If you have fallen behind on paying your taxes and are now delinquent, there is probably a lien against your property. This means that the government has made a claim against your property. This will need to be addressed before you can close on a sale of your home. Selling your house for cash is the best way to ensure that you have immediate funds to pay off the lien. 

How Can You Sell Your House When You Owe Taxes on It?

There are a few ways that you can sell your house with property taxes still owed on it. The most straightforward way is to just pay the taxes, but that can require a large sum of money. If paying your taxes out right plus any fees incurred from being past due is not an option, there are a few other routes you can take. These include selling your house on the market and having taxes taken out at closing, requesting for a lien release, and selling your home to a real estate investor for cash. 

Let’s take a closer look at each of these avenues to sell your house when you owe taxes on it. 

Pay Your Taxes Outright

This is the simplest solution. If you can rectify your tax debt quickly, then you should pay it off so that any liens are removed from your title. The debt will continue to grow the longer you don’t address it, so it’s best to clear it as soon as possible. If you can’t afford to pay your taxes outright on your own, selling your house for cash is the simplest way to change that. You’ll be able to close as soon as you want and have funds available immediately to pay off your taxes. 

Use the Proceeds From the Sale to Pay Your Tax Debt

When you close on your home, the closing attorney involved with your sale will ensure that first the taxes are paid, then the realtors’ commissions will be paid, and finally, any remaining balance will be transferred to you, the seller. 

Sometimes, the ratio of taxes owed and equity in the home does not leave enough money left over after the sale to satisfy the debt and the fees owed to the realtors. If this is the case, you will still be required to secure the funds to cover those debts. This can be a lengthy, complicated process. Selling your house for cash can eliminate a lot of time and fees spent when you are selling your home with property taxes owed on it.

Lien Releases

Another scenario involves obtaining a lien release prior to your sale. This lien release is called a “certificate of discharge,” and while it in no way releases you from the debts owed, it does provide you with the title to your property so that you are able to sell it outright. Once your sale is completed you can address the debt that you owe.

Sell to a Real Estate Investor

Typical buyers who see that a property has taxes owed on it will quickly back away. For many reasons, buyers see this as a red flag and find it too risky. Real estate investors, however, do not shy away from these properties. 

Real estate investors have purchased countless properties with liens attached to them in the past, so they know how to navigate the often-tricky process. Even better for a seller in a bind – real estate investors often prefer quick, cash sales, providing indebted sellers with immediate 

Sell Your House for Cash to Quick Fix Real Estate

When you’re behind on your taxes and a lien is placed on your home, it can be a scary and frustrating experience. If you want to sell your home with a tax lien but you aren’t sure how to begin, let the experts at Quick Fix Real Estate help you figure out the best path forward. 

We offer a quick and easy 3 step process to get you out from under your taxes. It starts with a free, no-obligation property assessment, followed by a real cash offer, and finishes with you choosing the closing date that works best for you. Contact us today to get started towards your real cash offer.