Sell a House With Back Taxes or Liens

This page is for Dallas-Fort Worth owners who owe back property taxes, or who have liens against the house, and are not sure a sale is even possible. In many cases it is. Tax balances and most liens are handled at closing, paid out of the seller's proceeds through the title company, as long as the sale price covers what is owed. This page explains how that works in Texas, and where the limits are.

How a sale works when taxes or liens are owed

Start with the property address and whatever you know about what is owed. If you have a tax statement, a letter from the county tax office, or a lien notice, those figures help. We estimate what the house will be worth after repairs, using recent sales of similar homes nearby, subtract the repair cost and the costs of holding and reselling the house along with a modest margin, and that gives the offer.

Before closing, the title company researches the title and orders payoff figures from the county tax office and any lienholders. At closing, those balances are paid from your proceeds first, the loan is paid off if there is one, and the remainder goes to you. Every figure appears on the settlement statement, which you review before signing. If the balances are larger than the offer, we will tell you that plainly rather than sign a contract that cannot close.

A sale cannot close until title can be cleared or the balances are handled at closing. That is not our rule. It is how title insurance and Texas closings work for any buyer, which is why the honest first step is finding out exactly what is owed.

Back property taxes in Texas

Texas property taxes are due each year, and delinquent taxes accrue penalties and interest the longer they go unpaid. The balance on an old tax bill can be much larger than the original amount, which is why guessing at the number is a mistake. The county tax office can give you the exact payoff figure, and the title company will order a current one before closing.

If delinquent taxes stay unpaid long enough, a taxing unit can sue to foreclose its tax lien, and that process can lead to the house being sold at a sheriff sale. A completed sale before that point pays the tax balance at closing and ends the exposure. We are a buyer, not a tax advisor or a law firm, and we cannot stop a tax suit or negotiate your balance down. If you have received court papers about your taxes, a Texas real estate attorney or the county tax office itself is the right first call, and nothing on this page should delay that.

Other liens

Liens come in several forms: a judgment lien from a court case, a mechanic's lien from unpaid work on the house, an HOA lien for unpaid assessments, or a federal or state tax lien. Most are handled the same way at closing. The title company gets a payoff or release figure from the lienholder, the balance is paid from the proceeds, and the lien is released so title can pass. Older or disputed liens can take longer to sort out, and a few cannot be cleared without the lienholder's cooperation. When that happens, we will tell you what the title company found and what it means for the timeline, and a closing that would normally take about 7 to 14 days when title is clear may take longer.

Your other options

You do not have to sell to deal with back taxes. Ask your county tax office whether it offers a payment plan for delinquent taxes. Availability and terms are up to the taxing unit, but if a plan exists and you want to keep the house, paying the balance down over time may be the right answer. If you are over 65 or disabled, also ask the tax office about a tax deferral. A deferral applies only to a qualifying residence homestead, it is not forgiveness, and interest continues to accrue while payment is postponed. If the balance is tied to a loan problem as well, the pages on being behind on payments and facing foreclosure cover the mortgage side of the picture. A HUD-approved housing counselor can review your whole situation for free at (800) 569-4287. Selling to us makes sense when you want the house and its balances finished in one step, not because it is the only step available.

Questions about taxes and liens

How much do I actually owe in back taxes?

We cannot know until the county tax office gives a payoff figure, and neither can you from an old statement, because penalties and interest keep accruing. The title company orders a current figure before closing, and it appears on your settlement statement. You can also ask the county tax office directly at any time, for free.

Can you buy the house if the liens are more than it is worth?

If the balances that must be cleared are larger than any price we can pay, a normal sale cannot close, and we will tell you that plainly. In that case your options may include negotiating with lienholders or speaking with an attorney about the liens themselves. We will not sign a contract we know cannot close.

Do I have to pay the taxes before I can sell?

Usually not out of your own pocket. In an ordinary sale the tax balance is paid from the seller's proceeds at closing through the title company. What matters is whether the sale price covers the balances that have to be cleared.

What if I am a landlord and the rental owes taxes?

The same closing process applies, and the house can often be sold with tenants in place at the same time. The tired landlord page covers selling a rental without ending the lease first.

Where we buy

Ready Estates buys houses across the Dallas-Fort Worth metroplex, in the cities listed on our areas we serve page. If you want the real numbers on your house, send the form or call (469) 248-7237 and we will start with the address and what the title search shows.