How to sell a house with a lien?

The short answer

Liens are paid out of the proceeds at closing: the title company's preliminary report lists every one recorded against the property, escrow orders a payoff demand for each, the amounts come off the seller's side of the settlement statement, and a release records alongside the deed, so a lien only stops a sale when it is larger than the equity behind it.

A lien is not a bar to selling. It is a claim that has to be satisfied before clean title can pass, and the machinery for satisfying it is the same machinery that pays off your mortgage. The two situations that turn it into a real problem are a lien you did not know about, found late, and a stack of liens that adds up to more than the house is worth.

The preliminary title report is the list

Within days of escrow opening, the title company searches the county records and issues a preliminary report showing everything recorded against the parcel. On a typical file that is the first deed of trust and possibly a second or a HELOC. On a harder one it also carries an HOA assessment lien, a delinquent property tax lien, an IRS or Nevada state tax lien, an abstract of judgment from a creditor who sued and won, a mechanic's lien from a contractor or supplier who was not paid, or a recorded child support lien.

Priority is mostly the order of recording, with property taxes ahead of everything regardless of date. That order decides who is paid first if the money runs short, so the report tells you not only what is owed but in what sequence it will be settled.

How each one gets cleared

For each lien, escrow orders a written payoff demand from the holder, good to a stated date. At funding the demands are paid in priority order out of the sale proceeds, and each holder then records a release, a reconveyance or a satisfaction that takes the claim off the parcel. The seller signs an authorization and otherwise does nothing. On the settlement statement it all appears as one column of deductions, and the wire you receive is what is left.

The ones that take time are the wrong ones. A judgment paid years ago whose release was never recorded, a lien against a different person with the same name, a mechanic's lien filed in the middle of a dispute about the work: none of those clears with a payoff demand. The fixes are a recorded release from the claimant, a surety bond that substitutes for the lien so the sale can close while the fight continues, or a court order, and each takes weeks. This is the argument for pulling the record before you list rather than at day ten of escrow.

When the liens are bigger than the equity

If the payoffs plus the costs of sale exceed the price, the sale cannot record unless somebody covers the gap. There are three ways it usually goes. You bring the difference to closing. You negotiate: judgment creditors and sometimes contractors will accept less than the face amount for certain money now, and the reduction has to be in writing before escrow pays anything. Or it becomes a short sale, which needs the first lender's approval of the price and the net, and separately the consent of every junior lienholder, any one of whom can hold the closing hostage for a payment.

Nevada adds a wrinkle worth knowing about. Under the state's common-interest ownership law an HOA's lien for unpaid assessments carries a superpriority piece, roughly nine months of assessments, that sits ahead of the first deed of trust. That is a small amount of money with outsized leverage, and it is the reason an HOA lien behaves less like an ordinary junior claim than its recording date suggests.

Seeing them before you list

The county recorder's index is public and searchable by name and by parcel number, and every one of these instruments was recorded there. An afternoon on your own name and the parcel turns up most of what a preliminary report would, which is enough to start clearing a stale release months before it matters. Our guide to reading a county property record walks the index, and the parcel pages here carry the record for a Las Vegas address.

One limit, plainly: Kouzr is not a title company and the record on this site is not a title search. The preliminary report from the company handling your sale is the authoritative list, and the one a buyer's lender acts on.

Questions people ask

How do I find out if there is a lien on my property?

Search the county recorder's index by your name and by the parcel number, which is public and free in Clark County. A title company will also run a preliminary report, and that is the version a lender and a buyer will rely on.

What happens to a judgment lien when you sell your house?

It is paid from the proceeds at closing in its recording priority, and the creditor records a satisfaction. If the proceeds cannot cover it, the creditor either accepts a negotiated lesser amount in writing or the sale does not close.

Can a contractor put a lien on my house without telling me?

A mechanic's lien has notice requirements before and at recording, so in practice you should hear about it, but liens do surface late. Once recorded it clouds title until it is paid, released, bonded around or removed by a court.

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General information about buying, renting and selling a home in the United States, not legal, tax or lending advice, and not a commitment to lend. Loan programme rules change and individual lenders apply stricter requirements than the programmes do. Where a figure comes from Kouzr it is computed from our own daily snapshots of active listings in the market named beside it. How these numbers are made.