Sell a House With Delinquent Property Taxes
Unpaid property taxes do not simply sit there. Both states we buy in eventually move a delinquent property toward a tax sale, and once that starts there is a clock running against you. The mechanics differ by state, so check the note for yours below.
The thing most people get wrong: you can still sell. Back taxes are a lien on the property, and liens get paid out of the proceeds at closing like any other debt. You do not need to find the money first in order to sell.
It works differently in each state
Read the one your house is in. The difference changes how much time you have.
Indiana
In Indiana the county puts a delinquent property into a tax sale, where the tax lien is sold to a bidder. From that point a redemption period runs, during which the owner can still clear the debt and keep the property. Selling during that window pays the taxes out of the proceeds and ends the problem, which is why the redemption deadline is the date to watch.
Tennessee
Tennessee counties collect delinquent property taxes through a court action, so a tax sale here arrives as a lawsuit filed by the county rather than an administrative auction. There is a redemption period after a sale as well. The practical advice is the same in both states: the lien gets paid out of the proceeds at closing, so selling is available to you long after it feels like it should not be.
What your options are
Selling to us is one of them, and it is not always the right one. Here is the honest version.
Pay the balance or arrange a plan
Counties will often work with an owner who contacts them before the sale rather than after. If you can clear it, that is the cleanest outcome and the house stays yours.
Sell before the redemption period expires
Through the redemption period you still hold the property, and a sale pays the taxes off at closing. This is the window where you have the most control over the price, so the earlier you move the better your position.
List it on the market
Possible, but tax trouble often comes with the house needing work, and a buyer using a mortgage may not be able to close on a property in poor condition. A listing also takes time you may not have against a redemption deadline.
Sell for cash with the lien in place
We buy with taxes outstanding. Title calculates the payoff, the proceeds clear it at closing, and anything above the taxes and costs goes to you.
How selling to HudREI works here
- 1
Give us the address and tell us what you know about the balance. You do not need an exact figure — the county record is public and title will pull the authoritative number.
- 2
We make a cash offer with the tax position already accounted for, so the number you hear is the number the payoff comes out of.
- 3
Title orders the payoff from the county treasurer and, where a certificate has been sold, from the certificate holder.
- 4
At closing the taxes are paid from the proceeds and the lien is cleared. Whatever remains is yours.
How long it takes
Two to three weeks is typical. Where a redemption deadline is close, tell us the date on the first call — title can usually prioritise a payoff quote, but only if we know the deadline exists.
Questions sellers actually ask
Can I sell a house that has a tax lien on it?+
Yes. The lien attaches to the property and is paid out of the sale proceeds at closing. You do not have to clear it before you sell, and you do not need cash up front.
What if the tax certificate has already been sold at the tax sale?+
Through the redemption period you still own the property and can still sell. The redemption amount is what gets paid at closing instead of the plain tax balance. Once that period expires your position changes significantly, which is why the date matters.
Do I have to pay the back taxes before you will buy?+
No. That is the whole point — we expect them. They come out of the proceeds, not your pocket.
Will I get anything after the taxes are paid?+
If the price covers the taxes, any mortgage, and closing costs, the balance is yours. We will tell you up front what that looks like rather than leaving you to find out at the table.
There is a mortgage and back taxes. Does that change things?+
Both get paid from the proceeds, taxes generally ahead of the mortgage. If the two together exceed what the house is worth, we will say so early rather than waste your time.
We buy houses; we are not attorneys or tax advisers. Nothing here is legal advice, and on anything involving a court, an estate, or the county, you should talk to a professional about your own situation.
Where we buy
We buy across Indiana and Tennessee. These are some of the areas where this comes up most.
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