Selling a House with a Tax Lien


You’ve just found out that there is a lien on your house. What do you do? A tax lien can be a big problem for homeowners. Not only can it make it difficult to sell your home, but it can also lead to steep fines and penalties. 

In this guide, you’ll find out the process of selling your house with a tax lien. You’ll find the answers you need to get through this difficult time. 

With our guide, you’ll be able to sell your home quickly and easily, without any added stress or hassle.

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What Is a Property in Lien?

A property in lien is a creditor’s claim to your real estate title. They secure a lien against the land. Sometimes you’ll see “possessory lien” or “lien on real estate.” That’s because it provides its holder with legal rights to occupy and possess your property until you satisfy all your debts.  

A federal tax lien is a legal claim by the government against your property to secure the payment you owe as a taxpayer. The lien arises when you fail to pay a tax debt after receiving a demand for payment. The IRS or state agency may file the lien if they couldn’t collect your taxes.

It also acts as a security interest in your house until the lien release goes through. A property in lien is critical to disclose in a real estate transaction. That’s because it gives the holder of the lien a legal right to sell or keep your land if you don’t pay what you owe.

When you sell your house with a lien, you transfer the title of your home to the buyer. But the lien is still attached to the property. This means that the buyer will own the property. But the lien holder will still have a right to receive payment for the money you owe them. In this case, you likely owe the federal government money.

Tax Lien Laws in Virginia

In Virginia, the tax lien laws are clear. If you don’t pay your income taxes, the local government has the right to sell your property in lien to recover the money you owe. They can sell your house to a third party to get the money. 

It is not a foreclosure. Foreclosure is the legal process whereby a lender takes back possession of a property you used as collateral for a loan.

The good news is that there are ways to avoid dealing with your property in a lien. If you are facing difficulties as a taxpayer, contact the local government. See if you can work out a payment plan. You may also be able to complete your home sale before IRS enforces the federal tax lien.

Different Types of Real Estate Taxes in Virginia

The Virginia real estate taxes are a type of tax that you pay locally as a landowner. The federal government uses money from these taxes to provide services. These include garbage collection, law enforcement, and education, among others. Back taxes are taxes that you owe but are not yet paid. 

There are different real estate taxes. You will have to pay property tax. This is the money you pay every year to the local government. You’ll have to pay taxes if you purchase or sell a home. This is sometimes called a transfer tax. 

You’ll have to pay local taxes each year. You may have to pay special taxes on top of local taxes. These may apply to you if you are a real estate owner who is using special services not included in your regular tax bill. 

There are also state taxes. The local government collects these and then sends them to Richmond. From the capitol, they will distribute these taxes throughout the state of Virginia. The federal government also collects taxes from you each year.

Can You Sell a Property in Lien in Virginia?

In Virginia, the term “property” refers to everything you own. This includes your house, car, money in the bank, and other assets. If the local government decides to sell your house in lien, they will transfer the title of your house to the buyer. 

If someone has a lien on your property, it means that they have a legal claim to possession of the property. That is until you pay all your debts or until they release their lien. 

Can you sell a property in lien in Virginia? Yes. You can lay claim to someone else’s property by purchasing it together with that person’s debts or credit.

How to Sell a Property in Lien in Virginia?

The first step is to work out a repayment plan with the local government and make arrangements for payments on the lien interest. To sell your property without the IRS repossessing it, you must pay everything you owe. 

You need to pay any outstanding taxes and fees before arranging for the sale of your house. Not able to do so? If you’re looking to get out of your mortgage, you have options. 

There are mortgage relief and VA loans options if you’re dealing with a mortgage lien.

Use House Sale for Repayment

If you are unable to pay off your property taxes, you can sell your house to repay the debt. You can team up with a trusted real estate agent. See which realtors received reviews from the property owner they worked with. 

Looking to skip the hassle of using a realtor? We buy houses in Virginia with no realtor fees. That’s because we buy houses for cash.

Sell House to Cash Home Buyer

There are many alternative ways to sell a house. You may be wondering, “will I sell my house with a lien?” Don’t feel worried if you have the lien attached. 

Many buyers want to buy a house quickly and for cash. They can then avoid the hassle and wait of a traditional sale.

Because it is a cash offer, you don’t have to worry about as many financing complications. You may be wondering, who will buy my house in Norfolk? No matter where you are, you can easily sell your home. From Norfolk to Virginia Beach, we buy houses in cash. Cash home buyers in Virginia Beach need to look no further either. 

When you sell your house to a cash home buyer, you’re getting a fair price for your home. And you’re also able to avoid the wait of a traditional sale.

Sell House As-Is with Lien Attached

Selling a house with a lien attached can be a difficult process, but it is not impossible. The most important thing to remember is to be patient. 

Keep negotiating with potential buyers until you find the right one. Or skip the hassle and work with a Virginia company that will buy your house for cash.

When you sell with a lien, look for a buyer who wants to buy a house as-is. This may take some time, but it is worth it to get the best price possible. 

Once you have found a buyer, start negotiations. Make sure to mention the lien attached to the property. If the buyer is still interested in purchasing the house, try to work out a deal that is fair for both parties. 

Be prepared to compromise on price and other terms. Make sure that the buyer knows up-front they must satisfy the lien. You can’t transfer the title to them without this step. In the process, you will want to do a title search. 

A title search is a due diligence procedure. You conduct it to ensure that the seller of the property owns the rights to sell the property. This proves there are no other encumbrances on the title. The title search also includes a review of the public records. This is important to determine any prior ownership interests in the property.

Once you have reached an agreement, make sure to draft a contract. Detailing the sale price, costs associated with the sale process, and any terms you agreed on.

Next, consult with your closing attorney and file any necessary documents. Your closing attorney will help you draft a deed. The deed makes the buyer responsible for satisfying the lien attached to the property. 

You’ll also want a certificate of discharge. A certificate of discharge is a legal document that proves that you have paid the full debt amount. The document is evidence that you’re released as the debtor from any further liability. The certificate of discharge is usually issued by the creditor or the bankruptcy trustee.

How to Sell a House with a Tax Lien Made Simple

Now that you’ve armed yourself with this knowledge, you can go out and sell your house with a tax lien. Remember to be patient and to price your home realistically. Opt for selling your house for cash if you want to save time and hassle. By following these tips, you will be able to find a buyer for your home in no time. 

Do you want to learn more about how to find buyers for your house in Norfolk? We can help! Give us a call or send us a message today! 866-833-5262