How to Sell a House with a Tax Lien: Complete Walkthrough

Selling a house should be straightforward. But when you discover a tax lien attached to your property, that simple transaction suddenly feels impossible. The phone calls from potential buyers stop. Traditional lenders back away. And you’re left wondering if you’ll ever be able to sell.

Here’s the truth: selling a house with a tax lien is absolutely possible—and you have more options than you might think. This complete walkthrough on how to sell a house with a tax lien will show you exactly what steps to take, which obstacles to expect, and how to navigate this challenging situation successfully.

Whether you’re dealing with federal tax liens, state tax liens, or property tax liens, this guide provides helpful solutions and expert service to move forward with confidence.

Key Takeaways

• Tax liens don’t prevent sales—they must be addressed during the transaction, typically paid from closing proceeds with proper coordination
• Multiple resolution pathways exist—including IRS discharge certificates, subordination agreements, lien payoffs, and direct sales to specialized buyers
• Timeline matters significantly—IRS processes take 30-45 days, while cash buyers can close in 7-14 days with lien resolution included
• Buyer pool narrows considerably—traditional buyers need clear title, making cash investors and specialized companies your primary options
• Professional guidance saves time and money—coordinating with counties, title companies, and industry experts prevents costly delays and mistakes

Understanding Tax Liens and Their Impact on Property Sales

A tax lien represents the government’s legal claim against your property due to unpaid taxes. Think of it as a financial anchor attached to your house—it doesn’t prevent you from owning the property, but it severely restricts what you can do with it.

What Is a Tax Lien?

Tax liens come in three primary forms:

Federal Tax Liens arise when you owe money to the Internal Revenue Service (IRS) for unpaid federal income taxes. The IRS files a Notice of Federal Tax Lien with your county recorder’s office, creating a public record that attaches to all your current and future property.

State Tax Liens work similarly but involve unpaid state income taxes, business taxes, or other state-level tax obligations. Each state has its own filing and resolution procedures.

Property Tax Liens are the most common type. When you fall behind on annual property taxes owed to your county or municipality, the local government places a lien on your property. These liens take priority over almost all other claims, including mortgages.

How Tax Liens Affect Your Ability to Sell

Tax liens create several significant obstacles when you try to sell:

🔒 Title Insurance Roadblock: Title companies will not issue title insurance with an active tax lien attached. Without title insurance, traditional buyers cannot get mortgage financing, effectively eliminating most of your potential buyer pool.

📉 Reduced Property Value: Even if you find a cash buyer, they’ll typically demand a substantial discount—often 20-40% below market value—to compensate for the complexity and risk involved.

⏰ Extended Timeline: Resolving tax liens through traditional channels takes time. IRS discharge applications require 30-45 days for processing, and coordinating with multiple government agencies can stretch your sale timeline to 60-90 days or longer.

💰 Mandatory Payoff Requirement: In most cases, the lien must be satisfied (paid in full) before or at closing. The lienholder has first priority to sale proceeds, meaning you’ll receive payment only after the lien is cleared.

Understanding these impacts helps you develop realistic expectations and choose the right strategy. For more background on different lien types, see our complete guide to property liens.

How to Sell a House with a Tax Lien: Step-by-Step Process

Navigating the sale of a house with a tax lien requires a systematic approach. Here’s the complete walkthrough to guide you through each critical phase.

Step 1: Determine the Exact Lien Amount and Details

Before you can move forward, you need complete clarity on what you’re dealing with.

Request a Payoff Statement: Contact the lienholder directly—whether that’s the IRS, your state revenue department, or county tax collector. Request an official payoff statement that includes:

• Principal amount owed
• Accrued interest (which continues accumulating daily)
• Penalties and fees
• Exact payoff amount as of a specific date
• Per-diem interest rate for calculating future payoff amounts

Obtain a Title Search: Hire a title company to conduct a comprehensive title search. This reveals all liens, judgments, and encumbrances attached to your property. You might discover additional issues you weren’t aware of—a common situation that requires help selling a house with multiple liens.

Calculate Your Equity Position: Subtract the total lien amount from your property’s current market value. This calculation determines whether you have enough equity to pay off the lien and still receive proceeds, or if you’re facing a short sale scenario.

Step 2: Explore Your Lien Resolution Options

You have several pathways for addressing the tax lien. The right choice depends on your timeline, financial situation, and sale goals.

Option A: Pay the Lien Before Listing

If you have available funds, paying off the lien before listing creates the cleanest transaction.

Advantages:

• Opens your property to all traditional buyers
• Achieves maximum market value
• Simplifies and accelerates the closing process

Process: Pay the full amount, obtain a lien release, and ensure it’s recorded with the county. The IRS typically issues releases within 30 days of payment.

Option B: Request an IRS Certificate of Discharge

For federal tax liens, the IRS offers a Certificate of Discharge (Form 14135) that allows property transfer even with the lien remaining active.

When It Works: The IRS grants discharge when:

• The sale proceeds will pay the IRS an amount equal to its interest in the property
• The government’s interest is determined to be worthless
• A partial payment plus other considerations satisfy the IRS

Timeline: Expect 30-45 days for IRS processing after submitting a complete application with supporting documentation.

Application Requirements:

• Completed Form 14135
• Property appraisal or broker price opinion
• Estimated settlement statement showing proposed distribution of proceeds
• Evidence of buyer’s financing or proof of funds

This option works well when you have sufficient equity to pay the IRS from closing proceeds. Learn more about selling a house with a tax lien using various resolution methods.

Option C: Request IRS Subordination

IRS Form 14134 allows the federal tax lien to take a secondary position to another creditor, typically a mortgage lender.

When to Use This: Subordination helps when you need to refinance to access cash for paying the lien, or when a buyer needs traditional financing but you have multiple liens with priority conflicts.

Key Difference: Unlike discharge, subordination doesn’t remove the lien—it simply changes its priority position in relation to other claims.

Option D: Arrange Lien Payoff from Sale Proceeds

The most common solution involves coordinating with the lienholder to accept payment directly from closing proceeds.

How It Works:

1. Obtain written agreement from the lienholder to accept payoff at closing
2. Provide the title company with exact payoff information
3. Title company prepares a settlement statement showing lien payoff
4. At closing, the lienholder receives payment before you receive any proceeds
5. Title company ensures lien release is filed immediately after closing

Critical Success Factor: Get everything in writing. The lienholder, title company, and buyer must all agree to the arrangement before proceeding.

For state-specific guidance, Florida sellers should review our guide to selling a house with a lien in Florida.

Step 3: Find the Right Buyer for Your Situation

Not all buyers can or will purchase a property with a tax lien attached. Understanding your buyer options helps you target your marketing effectively.

Traditional Buyers (Limited Viability)

Reality Check: Traditional buyers using mortgage financing cannot close without clear title and title insurance. Unless you can resolve the lien before closing, these buyers won’t work.

Possible Exception: If you can obtain an IRS discharge or arrange guaranteed payoff from proceeds with title company cooperation, some traditional buyers might proceed—but expect significant hesitation and potential deal failures.

Cash Investors and Wholesalers

Cash investors don’t require title insurance or mortgage approval, making them more flexible with lien situations.

Typical Terms:

• Purchase price 20-40% below market value
• Quick closing timeline (14-30 days)
• Buyer handles lien coordination or requires you to resolve before closing
• As-is purchase with no repairs or improvements required

Finding Cash Investors: Look for investors who buy houses with liens through local real estate investment groups, online platforms, and direct mail campaigns targeting “we buy houses” companies.

Specialized Property Solutions Companies

Companies like Sure Path Property Solutions specialize in complicated situations including tax liens, making them often the best option for sellers needing helpful guidance and trustworthy service.

Why This Works Best:

• ✅ Experience with lien resolution: Industry experts who coordinate with government agencies daily
• ✅ Streamlined process: Handle all paperwork, negotiations, and title work
• ✅ Fast closing: Typically 7-14 days from agreement to closing
• ✅ Certainty: Cash offers with no financing contingencies or inspection issues
• ✅ Fair pricing: Competitive offers that account for lien amounts while providing you with maximum net proceeds

How It Works: These companies evaluate your total situation—not just the property value, but the lien amount, timeline urgency, and your specific needs. They provide a cash offer, coordinate directly with lienholders, and handle the entire resolution process.

If you’re in a major market, specialized services are available for selling houses fast in Orlando, Houston, or other locations.

Step 4: Prepare Required Documentation

Organized documentation accelerates the process and prevents delays.

Essential Documents:

📄 For the Lienholder:

• Formal payoff request letter
• Property information (address, legal description, parcel number)
• Proposed closing date
• Contact information for title company

📄 For the Title Company:

• All lien documentation and notices
• Payoff statements with per-diem interest calculations
• Any discharge or subordination applications and approvals
• Proof of identity and ownership
• Existing deed and mortgage information

📄 For the Buyer:

• Full disclosure of all liens and encumbrances
• Estimated settlement statement showing lien payoff
• Timeline for lien resolution
• Any IRS discharge or subordination approvals

Pro Tip: Create a digital folder with all documents organized by category. This allows you to respond instantly to requests from any party, preventing the delays that kill deals.

Step 5: Coordinate the Closing Process

Closing a sale with a tax lien requires precise coordination among multiple parties.

The Coordination Challenge: Your title company, lienholder, buyer, and potentially the IRS must all work together seamlessly. One miscommunication can delay closing by weeks.

Timeline Management:

• 45 days before closing: Submit any IRS discharge or subordination applications
• 30 days before closing: Obtain final payoff statements with per-diem calculations
• 14 days before closing: Provide title company with all lien documentation
• 7 days before closing: Confirm all parties have signed off on settlement statement
• 3 days before closing: Verify lienholder will accept wire transfer or certified funds
• Day of closing: Ensure title company wires lien payoff immediately
• After closing: Confirm lien release is filed with county recorder

Common Closing Complications:

⚠️ Payoff Amount Changes: Interest accrues daily, so the payoff amount increases between when you get the statement and when you close. Always request per-diem interest rates and build in a small buffer.

⚠️ Lienholder Delays: Government agencies don’t always respond quickly. Build extra time into your timeline and follow up persistently.

⚠️ Title Company Inexperience: Not all title companies regularly handle lien situations. Choose one with specific experience in tax lien transactions.

Working with Professionals: This is where expert service makes the difference. Companies specializing in problem properties handle these coordination challenges daily, preventing the mistakes that cost you time and money.

For properties facing additional complications, explore options for selling houses with back taxes or tax debt.

Special Situations and Complications

Some tax lien scenarios involve additional layers of complexity that require specialized approaches.

Multiple Liens on One Property

When your property has multiple liens—perhaps federal tax liens, state tax liens, and property tax liens simultaneously—priority becomes critical.

Lien Priority Order (typically):

1. Property tax liens (almost always first priority)
2. Mortgage liens (if recorded before tax liens)
3. Federal tax liens
4. State tax liens
5. Judgment liens and other encumbrances

Why Priority Matters: Sale proceeds are distributed according to priority. First-priority liens get paid in full before second-priority liens receive anything.

Strategy for Multiple Liens: Calculate total lien amounts against your property value. If you have sufficient equity to pay all liens, coordinate simultaneous payoffs. If not, you may need to negotiate partial settlements with lower-priority lienholders who might otherwise receive nothing.

Our team handles complex situations with multiple liens regularly, coordinating with all parties to maximize your net proceeds.

Tax Liens Combined with Foreclosure

When you’re facing both tax liens and mortgage foreclosure, time becomes your most critical factor.

The Urgency: Foreclosure sales typically wipe out junior liens, but property tax liens often survive foreclosure. You need to act before the foreclosure auction date.

Options:

• Sell quickly to a cash buyer who can close before the auction date
• Request foreclosure postponement from your lender while you arrange the sale
• Negotiate a short sale if you owe more than the property is worth

If you’re in this situation, read our emergency guide on selling before a tax sale or selling fast to avoid foreclosure.

Inherited Property with Tax Liens

Inheriting a house with tax liens creates unique challenges, especially when multiple heirs are involved.

Common Scenario: A parent passes away owing back property taxes. The heirs inherit both the property and the tax debt. Before they can sell, they must:

1. Complete probate proceedings
2. Resolve the tax lien
3. Obtain agreement from all heirs on sale terms
4. Coordinate closing with all parties

Complicating Factors:

• Disagreement among heirs about whether to sell
• Insufficient estate funds to pay the lien
• Unclear title due to probate issues
• Additional tax liens that accrued after death

Solutions: Specialized buyers can purchase inherited property with liens, often without requiring all heirs to agree or complete lengthy probate processes. Learn more about selling inherited property with multiple owners or when a sibling won’t agree to sell.

State Tax Liens vs. Federal Tax Liens

While the principles are similar, state and federal tax liens have important differences.

Federal Tax Liens (IRS):

• Governed by Internal Revenue Code
• Specific discharge and subordination processes (Forms 14135 and 14134)
• Generally 30-45 day processing timeline
• Nationwide consistency in procedures

State Tax Liens:

• Governed by individual state laws
• Procedures vary significantly by state
• Processing timelines range from 2 weeks to 3+ months
• May have different redemption rights and priority rules

State-Specific Considerations: If you’re selling in a specific state, research that state’s particular requirements. For example, Texas property liens follow different rules than liens in other states.

For state tax lien situations, see our guide on selling a house with a state tax lien.

Property Tax Liens and Redemption Periods

Property tax liens carry unique characteristics that affect your sale timeline.

Redemption Periods: Most jurisdictions allow property owners a redemption period—typically 6 months to 3 years—during which you can pay the back taxes plus interest and penalties to prevent tax foreclosure.

Tax Lien Certificates: In some states, counties sell tax lien certificates to investors who pay your back taxes in exchange for a lien on your property with high interest rates (often 10-25% annually).

Impact on Sales:

• You can sell during the redemption period, but must pay all back taxes plus accumulated interest at closing
• Tax lien certificate holders have priority claim to proceeds
• Some buyers hesitate due to redemption period complications

Best Approach: Work with cash buyers for tax lien properties who understand these nuances and can navigate redemption period sales efficiently.

Alternative Solutions When Traditional Sales Won’t Work

Sometimes the numbers simply don’t work for a traditional sale. When your lien amount exceeds your property value, or when time constraints make conventional approaches impossible, consider these alternatives.

Short Sales with Lien Negotiation

A short sale occurs when you sell for less than you owe, requiring lienholders to accept less than full payment.

How It Works:

1. Obtain property valuation showing market value is less than total liens
2. Find a buyer willing to purchase at market value
3. Submit short sale package to all lienholders requesting partial payment acceptance
4. Negotiate with each lienholder separately
5. Close once all lienholders approve the settlement

IRS Short Sale Considerations: The IRS sometimes accepts partial payment in short sales when:

• They determine full payment is unlikely through other collection methods
• The proposed payment represents their realistic recovery amount
• You demonstrate financial hardship

Timeline Reality: Short sales typically take 3-6 months due to extensive negotiations and approval processes.

Offer in Compromise

An Offer in Compromise (OIC) allows you to settle your tax debt for less than the full amount owed.

When IRS Accepts OIC:

• Doubt as to collectibility (you can’t pay the full amount)
• Doubt as to liability (legitimate dispute about the tax owed)
• Effective tax administration (exceptional circumstances make full payment inequitable)

Process:

1. Submit Form 656 with detailed financial information
2. Include application fee and initial payment
3. Wait 6-24 months for IRS evaluation
4. If accepted, pay the agreed amount and receive lien release

Impact on Property Sales: If you have an accepted OIC, you can sell the property and use proceeds toward the compromise amount. However, the long processing time makes this impractical for most sale situations.

Payment Plans and Installment Agreements

IRS installment agreements allow you to pay tax debt over time while selling your property.

How This Helps: You can:

• Sell the property with the lien in place
• Use sale proceeds to make a substantial payment toward the tax debt
• Continue paying the remaining balance through installments
• Potentially negotiate lien subordination or discharge to facilitate the sale

Requirements: You must remain current on all new tax obligations and make all scheduled installment payments.

Selling to Specialized Cash Buyers

For many sellers, the fastest and most practical solution is selling directly to a company that specializes in properties with tax liens and other complications.

Why This Often Makes the Most Sense:

💡 Speed: Close in 7-14 days instead of 60-90+ days

💡 Certainty: Cash offers with no financing contingencies that might fall through

💡 Simplicity: One company handles all lien coordination, paperwork, and negotiations

💡 Expertise: Work with industry experts who solve these problems daily

💡 Fair Pricing: Receive competitive offers that maximize your net proceeds after lien payoff

How the Process Works:

1. Contact the buyer and provide property and lien information
2. Receive a cash offer within 24-48 hours
3. Accept the offer and choose your closing date
4. The buyer coordinates all lien payoffs and title work
5. Close quickly and receive your net proceeds

Sure Path Property Solutions provides this exact service—offering helpful solutions with friendly and caring expert guidance throughout the process. We handle the complexity while you move forward with confidence.

Explore options for selling houses with tax debt fast or get cash for houses with back taxes.

Costs and Financial Considerations

Understanding the financial impact of selling with a tax lien helps you make informed decisions and set realistic expectations.

Typical Costs Involved

Lien Payoff Amount: Your primary cost is the lien itself, including:

• Original tax debt
• Accumulated interest (compounds daily)
• Penalties and fees
• Administrative costs

Example Calculation:

• Original tax debt: $25,000
• Interest (3 years at 6%): $4,500
• Penalties: $3,750
• Total payoff: $33,250

Closing Costs: Standard closing costs still apply:

• Title search and insurance: $1,000-$2,500
• Recording fees: $100-$500
• Transfer taxes: Varies by location (0.1%-2% of sale price)
• Attorney fees (if applicable): $500-$2,000
• Real estate commissions (if using agent): 5-6% of sale price

IRS Discharge/Subordination Fees:

• Application fees: $0-$150
• Expedite fees (if available): $500-$1,000

Calculating Your Net Proceeds

Use this formula to estimate what you’ll actually receive:

Net Proceeds = Sale Price – (Lien Payoff + Mortgage Payoff + Closing Costs + Commissions)

Example Scenario:

• Property sale price: $200,000
• Tax lien payoff: $33,250
• Mortgage payoff: $125,000
• Closing costs: $4,000
• Real estate commission (6%): $12,000
• Net proceeds to seller: $25,750

Critical Insight: When working with specialized cash buyers, you typically pay no commission and reduced closing costs, potentially increasing your net proceeds despite a lower sale price.

Comparison Example:

In this example, the traditional sale provides better net proceeds, but the cash buyer offers speed and certainty—valuable factors when you need to resolve the situation quickly.

Tax Implications of Selling

Selling property with tax liens can create additional tax consequences.

Capital Gains Tax: If you sell for more than your cost basis (original purchase price plus improvements), you may owe capital gains tax on the profit.

Cancellation of Debt Income: If any lienholder accepts less than full payment (short sale scenario), the forgiven amount may be considered taxable income. However, insolvency exceptions often apply.

1099-C Reporting: Lienholders who forgive $600 or more in debt must issue Form 1099-C, which you must report on your tax return.

Consultation Recommended: Work with a tax professional to understand your specific situation and potential tax liability before closing.

Why Professional Help Makes the Difference

Attempting to navigate tax lien sales alone often leads to costly mistakes, unnecessary delays, and missed opportunities.

Common Mistakes to Avoid

❌ Underestimating Timeline Requirements: Assuming you can resolve IRS liens in a week instead of the actual 30-45 days, causing deals to fall through

❌ Failing to Get Written Agreements: Proceeding based on verbal promises from lienholders, only to discover they won’t cooperate at closing

❌ Incomplete Documentation: Submitting IRS discharge applications without required supporting documents, resulting in rejections and restarts

❌ Choosing Inexperienced Title Companies: Working with title companies unfamiliar with lien transactions, leading to errors and delays

❌ Not Calculating Per-Diem Interest: Using outdated payoff amounts that don’t account for daily interest accrual, creating shortfalls at closing

❌ Inadequate Buyer Screening: Wasting months with buyers who ultimately can’t or won’t close on a property with liens

❌ Missing Disclosure Requirements: Failing to properly disclose liens to buyers, creating legal liability and deal cancellations

Benefits of Working with Experts

Sure Path Property Solutions and similar specialized companies provide:

🏆 Established Relationships: Direct contacts with IRS agents, county tax collectors, and title companies who regularly handle lien situations

🏆 Process Expertise: Hundreds of successful lien transactions providing proven systems and procedures

🏆 Time Savings: Handle all coordination, paperwork, and follow-up while you focus on your next steps

🏆 Problem-Solving: Creative solutions for complicated situations that would stop traditional transactions

🏆 Financial Clarity: Transparent offers showing exactly what you’ll net after all liens and costs

🏆 Stress Reduction: One point of contact managing the entire process from offer to closing

When to Seek Professional Assistance

Consider professional help when:

• You’re facing foreclosure or tax sale deadlines
• Multiple liens complicate the priority and payoff calculations
• You’ve inherited property with tax liens and multiple heirs
• Previous attempts to sell have failed
• You need to close quickly (within 30 days)
• The lien amount is close to or exceeds your property value
• You’re dealing with IRS liens requiring discharge or subordination
• Title issues exist beyond just the tax lien

Taking Action: The sooner you reach out for helpful guidance, the more options you’ll have. Delays reduce your choices and often increase costs as interest continues accruing.

For immediate assistance, explore services for selling houses with liens fast or getting help with lien sales.

Frequently Asked Questions

Can I sell my house if I have a tax lien?

Yes, absolutely. You can sell a house with a tax lien, but the lien must be addressed during the transaction—typically paid from closing proceeds. The lien doesn’t prevent the sale; it just adds steps to the process and limits your buyer pool primarily to cash purchasers.

How long does it take to sell a house with a tax lien?

Timeline varies by approach:

• Traditional sale with IRS discharge: 60-90 days
• Cash buyer with lien coordination: 7-14 days
• Short sale with lien negotiation: 3-6 months

The IRS alone requires 30-45 days to process discharge applications, so factor this into any timeline.

Will I receive any money from the sale if there’s a tax lien?

It depends on your equity position. If your property value exceeds the total of all liens, mortgages, and closing costs, you’ll receive the difference. If liens exceed property value, you may need to bring money to closing or negotiate a short sale where lienholders accept less than full payment.

Can the IRS take my house for unpaid taxes?

Yes, but it’s a last resort. The IRS can seize and sell property to satisfy tax debt, but this typically occurs only after years of non-payment and ignored collection attempts. Selling proactively before IRS seizure gives you far more control and typically results in better financial outcomes.

What’s the difference between a tax lien and a tax levy?

A tax lien is a legal claim against your property that secures the government’s interest in your tax debt. A tax levy is the actual seizure of property to satisfy the debt. Liens come first as a warning; levies follow if the debt remains unpaid.

Do I need to hire an attorney to sell a house with a tax lien?

Not necessarily. Many sellers successfully complete these transactions without attorneys, especially when working with experienced cash buyers who handle the coordination. However, complex situations—multiple liens, disputed amounts, or legal complications—may benefit from legal counsel.

Can I sell my house with a lien for cash?

Yes, and this is often the most practical approach. Cash buyers don’t require title insurance or mortgage approval, making them much more flexible with lien situations. They can close quickly and typically handle all lien coordination themselves.

How much will a tax lien reduce my sale price?

Discount amounts vary based on:

• Total lien amount relative to property value
• Local market conditions
• Property condition
• Urgency of your timeline
• Buyer type (investor vs. specialized buyer)

Typical discounts range from 20-40% below market value when selling to investors, though specialized companies often provide more competitive pricing.

Regional Considerations and State-Specific Information

Tax lien laws and procedures vary significantly by state. While this guide provides general principles applicable nationwide, understanding your state’s specific requirements helps you navigate the process more effectively.

State Redemption Periods

Different states allow different timeframes for property owners to redeem property after tax lien sales:

• Short redemption periods (6 months – 1 year): Georgia, Texas (some counties), Connecticut
• Medium redemption periods (1-2 years): Florida, Illinois, New Jersey
• Long redemption periods (2-4 years): Iowa, Kansas, Wyoming

Impact on Sales: Longer redemption periods provide more time to arrange sales but also mean tax lien certificate holders wait longer for returns, potentially increasing the interest and penalties you’ll owe.

State Tax Lien Priority Rules

Most states follow similar priority rules (property taxes first, then mortgages, then other liens), but exceptions exist:

• Florida: Property tax liens take absolute priority over all other claims
• Texas: Property tax liens have super-priority status, surviving even foreclosure
• California: Property tax liens take priority but have specific redemption procedures

Understanding your state’s priority rules helps you calculate realistic net proceeds and identify which liens must be paid in full versus which might accept negotiated settlements.

Local Market Considerations

Real estate markets vary dramatically by region, affecting your options:

Major Metropolitan Markets (Los Angeles, Miami, Houston, Dallas, Atlanta):

• Larger pool of cash investors and specialized buyers
• More title companies experienced with lien transactions
• Potentially faster processing due to higher transaction volumes
• See market-specific guides for Los Angeles, Miami, Houston, Dallas, or Atlanta

Smaller Markets:

• Fewer specialized buyers requiring more extensive marketing
• Title companies may have less lien experience
• Potentially longer timelines due to limited resources

State-Wide Resources:

• Texas property sales
• Florida property sales

Creating Your Action Plan

Now that you understand how to sell a house with a tax lien, it’s time to develop your specific strategy.

Assess Your Situation

Start by answering these key questions:

1. What’s your timeline?
   • Urgent (foreclosure, tax sale deadline): Cash buyer route
   • Moderate (2-3 months): IRS discharge with traditional or cash buyer
   • Flexible (3+ months): All options available
2. What’s your equity position?
   • Positive equity (value exceeds liens): Standard sale with lien payoff
   • Minimal equity: Cash buyer or short sale
   • Negative equity: Short sale or deed in lieu
3. What type of lien(s) do you have?
   • Federal tax lien: IRS discharge/subordination process
   • State tax lien: State-specific procedures
   • Property tax lien: County coordination
   • Multiple liens: Complex coordination required
4. What’s your priority?
   • Maximum net proceeds: Traditional sale if possible
   • Speed and certainty: Cash buyer
   • Debt resolution: Short sale or OIC
   • Stress reduction: Professional buyer handling everything

Choose Your Strategy

Based on your assessment, select the approach that best fits your needs:

Strategy 1: Traditional Sale with IRS Discharge

• Best for: Sellers with 60-90 days, positive equity, and federal tax liens
• Steps: Apply for IRS discharge → List with agent → Accept offer → Close with lien payoff
• Pros: Potentially highest sale price
• Cons: Longest timeline, most complexity, deal failure risk

Strategy 2: Cash Buyer with Lien Coordination

• Best for: Sellers needing speed, certainty, or facing complex situations
• Steps: Contact cash buyer → Receive offer → Accept → Buyer handles lien coordination → Close quickly
• Pros: Fast, certain, simple
• Cons: Lower sale price than market value

Strategy 3: Short Sale with Lien Negotiation

• Best for: Sellers with negative equity or liens exceeding value
• Steps: Find buyer → Submit short sale packages → Negotiate with lienholders → Close after approvals
• Pros: Resolves debt exceeding property value
• Cons: Very long timeline, uncertain outcome, complex negotiations

Strategy 4: Hybrid Approach

• Best for: Sellers with moderate timelines and flexibility
• Steps: Simultaneously pursue IRS discharge AND market to cash buyers → Choose best option when both are available
• Pros: Maximum optionality
• Cons: More upfront work

Take the First Step

The hardest part is often just getting started. Here’s what to do right now:

Immediate Actions (This Week):

1. ✅ Request payoff statements from all lienholders
2. ✅ Order a title search to identify all encumbrances
3. ✅ Calculate your equity position
4. ✅ Research cash buyers in your area or contact Sure Path Property Solutions
5. ✅ Gather all property documentation

Short-Term Actions (Next 2 Weeks):

6. ✅ If pursuing IRS discharge, begin Form 14135 preparation
7. ✅ Contact 3-5 cash buyers for preliminary offers
8. ✅ Choose your strategy based on offers and timeline
9. ✅ Engage title company experienced with lien transactions
10. ✅ Begin coordinating with chosen buyer or listing agent

Ongoing Actions:

11. ✅ Follow up weekly with all parties (IRS, lienholders, buyers, title company)
12. ✅ Keep detailed records of all communications
13. ✅ Update payoff calculations as closing date approaches
14. ✅ Prepare for closing by organizing all required documents

Conclusion

Selling a house with a tax lien feels overwhelming at first—but as this complete walkthrough demonstrates, you have clear pathways forward. Whether you choose to pursue an IRS discharge, work with a traditional buyer, or sell quickly to a specialized cash buyer, the key is taking action with the right information and support.

Remember these essential points:

• Tax liens don’t prevent sales—they just require proper coordination and resolution
• Multiple strategies exist, from IRS discharge to cash buyer sales
• Timeline significantly impacts your best approach
• Professional expertise saves time, money, and stress
• The sooner you act, the more options you have

Your Next Steps:

Don’t let a tax lien continue controlling your financial future. The problem won’t resolve itself, and delays only increase interest and penalties while reducing your options.

Take action today:

1. Get your exact lien payoff amount from all lienholders
2. Calculate your equity position to understand your realistic options
3. Contact Sure Path Property Solutions for a no-obligation cash offer and expert guidance

We specialize in exactly these situations—providing helpful solutions with trustworthy service and friendly, caring support throughout the process. Our industry experts coordinate with counties, title companies, and government agencies daily, handling the complexity while you move forward with confidence.

Whether you’re dealing with federal tax liens, state tax liens, property tax liens, or multiple complications, we provide clear, practical solutions tailored to your specific situation.

Ready to move forward? Contact us today for your free property evaluation and cash offer. We’ll review your situation, explain your options, and provide a transparent offer showing exactly what you’ll net after all liens are resolved.

You don’t have to navigate this alone. Let our expert service guide you through this complete walkthrough—from initial assessment to successful closing—with the helpful guidance you deserve.