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What You Need To Know About Selling a House with a Lien in Michigan

How to sell a house with a lien

Are you considering selling your house in Michigan, but you’ve recently discovered there’s a lien attached to it? Selling a house that has a lien attached to it can be quite exhausting. While you desperately want to sell, you’re also courting the option of paying the lien and ignoring the home sale altogether. If you are considering selling a home in these conditions, you definitely want to know how to sell a house with a lien.

In this guide, we’ll walk through everything you need to know about selling a property that has a lien on it Michigan and what to do with the home sale proceeds.

What is a Lien?

A lien on a property is a legal claim that serves as collateral to secure a debt or obligation. It represents a right to possess or take action against the property if the debt is not repaid. Property owners may encounter liens for various reasons, including unpaid taxes, outstanding mortgage payments, or unresolved contractor bills.

The implications of placing a lien can be crucial, especially in the selling process. When a property owner decides to sell, any existing liens must be addressed to ensure a smooth transaction. Buyers typically expect a clear title, free from any encumbrances, to proceed with the purchase.

To remove the lien and clear the title, property owners may need to pay off the debt associated with the lien or negotiate with the lien holder. Once the debt is satisfied, the lien holder releases the lien, allowing the property to be sold. The proceeds from the sale can then be used to settle any outstanding debts, including the lien.

Types of Liens on a Home in Michigan

Michigan recognizes several types of property liens. These include:

- Tax Liens

If property taxes are not paid, the local government may place a tax lien on the property.

- Mortgage Liens

When you take out a mortgage to purchase a property, the lender typically places a mortgage lien on the house until the loan is fully repaid and this lien could affect your home equity.

- Judgment Liens

If a court rules against you in a lawsuit and you fail to pay the judgment, the prevailing party may place a judgment lien on your property.

- Mechanic's Liens

Contractors, subcontractors, or suppliers who have not been paid for work or materials provided to improve a property may place a mechanic’s lien on your house.

Is it Possible to Sell a House with a Lien?

Yes, it’s possible to sell the property with a lien. Selling the property that has a lien attached is indeed possible, but it requires careful navigation of legal and financial processes. Whether you’re aiming to sell the house for cash, addressing the lien is essential to ensure a smooth transaction.

House owners facing a property tax lien, for instance, must resolve the lien before proceeding with the sale. Similarly, any other liens placed on the property need to be dealt with to provide buyers with a clear title.

While a lien is a legal claim on the property, it doesn’t necessarily prevent the house from being sold. However, potential buyers may hesitate to proceed with the purchase unless the lien is addressed. Sellers who want to sell their house with a lien must take proactive steps to resolve the lien or negotiate with the holder of the lien.

The release of the lien is a crucial step in the selling process, as it clears the way for the sale to proceed. Sellers can deal with the liens by using the sale proceeds to pay off the house lien and remove it from the property title, facilitating a successful sale.

Process of Selling Your Home with a Lien

1. Identify the Lien: The first step is to determine what kind of lien is attached to your property and the amount owed.
2. Negotiate with the Lien Holder: Depending on the type of lien, you may be able to negotiate a settlement or payment plan with the holder of the lien.
3. Pay Off the Lien: Once you’ve reached an agreement with the holder of the lien, you’ll need to pay off the lien to release it from the property.
4. Obtain a Lien Release: After satisfying the lien, you’ll need to obtain a lien release document from the holder of the lien, confirming that the debt has been paid and that your home equity is intact.
5. Proceed with the Sale: With the lien released, you can proceed with selling your house as you normally would.

Working with Professionals when Dealing with a Property Lien in Michigan

Real Estate Attorney

The process of selling a house with a lien can be complex, especially when dealing with legal matters. Hiring a reputable real estate attorney in Michigan can help ensure that all legal requirements are met and that the transaction proceeds smoothly.

Real Estate Agent

A knowledgeable real estate agent with experience in selling properties with liens can be invaluable in guiding you through the process. They can help market your property effectively and assist in negotiating with potential buyers.

Can I Buy A House Sold with a Lien?

In Michigan, purchasing a house sold with a IRS lien is possible, but it comes with certain considerations. When a house be sold with a property lien, the buyer typically assumes responsibility for addressing the lien. It’s crucial for buyers to conduct thorough due diligence to understand the nature and extent of the lien on your home.

Involuntary liens, such as tax liens, may present challenges during the home sale process. However, voluntary liens, like mortgage liens, are typically addressed as part of the closing process. Buyers who want to purchase a house with a lien should ensure they have the means to pay off the lien or negotiate with the person holding the lien.

Before proceeding with the purchase, buyers should carefully review the terms of the sale and consider factors such as the property’s equity, potential sale proceeds, and any outstanding debts. Working with a real estate attorney can help buyers navigate the complexities of purchasing a property with a lien in Michigan.

Ultimately, while it is possible to buy a house sold with a lien in Michigan, buyers should proceed with caution and be prepared to address any lien on your home to ensure a smooth transaction.


Selling a house with a lien in Michigan may seem daunting, but with the right knowledge and assistance, it’s entirely possible to navigate the process successfully. By understanding the common types of lien your property can be subject to, knowing the steps involved in selling a house with a lien, and working with professionals, you can achieve a successful sale and move forward with your real estate goals. If you’re facing challenges with a lien on your property, don’t hesitate to seek guidance from legal and real estate professionals who specialize in Michigan real estate transactions. With their expertise and support, you can overcome obstacles and achieve a successful sale.

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