A lien on your Savannah property does not automatically mean you cannot sell it. In many sales, liens are identified in the title search and paid from the proceeds at closing, and you receive whatever remains. This guide is general information, not legal advice. For advice about your situation, talk with a licensed Georgia attorney.
The short answer: the closing attorney runs a title search, finds the recorded liens, requests a payoff from each lienholder, and pays them at settlement. If the sale price covers them, the buyer can receive clear title. When it does not, the sale needs more negotiation and the lienholders' cooperation.
What Is a Lien?
A lien is a claim against a property, usually for money owed, that has to be dealt with before the property can transfer with clear title. Recorded liens appear in a title search of the public records.
Common Types of Liens
Mortgage liens come from borrowing against the property. They are the most common and are paid off from the sale proceeds. If you owe more than the home is worth, you would need your lender's agreement to a short sale.
Judgment liens can arise when someone obtains a court judgment against you. Whether and how a judgment attaches to your property depends on the facts, so ask your attorney.
Contractor liens (often called mechanic's liens) are claimed by contractors or suppliers who say they were not paid for work on the property.
Federal tax liens. Under 26 U.S.C. § 6321, if a person liable for a federal tax neglects or refuses to pay it after demand, the amount becomes a lien in favor of the United States on all property and rights to property belonging to that person. Talk with a tax professional or attorney before selling a property with a federal tax lien.
State tax and property tax liens can also appear in a title search.
Homeowner association (HOA) claims can appear if dues or assessments go unpaid.
Child support or other court-ordered obligations can also lead to recorded claims. Your attorney can tell you how any of these apply.
How a Title Search and Payoff Work
Before closing, the closing attorney searches the public records for liens and other title problems, asks each lienholder for a payoff letter, and pays them from the proceeds at closing. Once paid, each lienholder should release its lien, and the closing attorney follows up on that.
If the total of the liens is more than the sale price, some creditors will not be paid in full. That is when a short sale or negotiation with lienholders may be needed, and it takes more time.
Why a Cash Sale Can Work Well With Liens
A cash buyer does not depend on mortgage financing, so there is no lender appraisal or underwriting on the buyer's side to slow down or derail a complicated title. The closing attorney still has to resolve the liens.
VP Buys Homes buys houses in Savannah and across Chatham County, including properties with liens. You do not need to resolve them before asking for an offer. For more on selling in as-is condition, see our guide to selling a house as-is in Georgia. To request an offer, visit our sell page or call (912) 515-6060.
Frequently Asked Questions
Can I sell my Savannah house if it has a lien on it?
Often, yes. Liens are typically identified in the title search, and the closing attorney requests payoff amounts and pays them from the sale proceeds. If the sale price covers the liens, the buyer can receive clear title. Your attorney can confirm what applies to your property.
What if my liens add up to more than the house is worth?
Then the proceeds will not cover everything, and the sale usually needs the cooperation of the lienholders, for example a lender agreeing to accept less than the full balance. That takes more time and approval, and an attorney can help.
How do I find out what liens are on my property?
A title search of the public records, which your closing attorney or a title company can run, shows recorded liens. Payoff letters from each lienholder give the exact amounts.
Do federal tax liens affect a sale?
Under 26 U.S.C. § 6321, if a person liable for a federal tax neglects or refuses to pay it after demand, the amount becomes a lien in favor of the United States on all property and rights to property belonging to that person. Talk with a tax professional or attorney before selling a property with a federal tax lien.