A tax lien doesn’t mean you can’t sell your house — it means the taxing authority gets paid first out of the proceeds before you see a dime. Here’s how property tax liens actually work in Texas, what they cost you at closing, and what your options are if the lien is bigger than your equity.
Property Tax Liens vs. Other Liens
In Texas, property tax liens attach automatically to real estate every January 1st for that year’s taxes, and they take priority over almost every other type of lien, including most mortgages. This is different from a judgment lien or a mechanic’s lien, which typically rank behind the mortgage. Because tax liens sit at the front of the line, a title company won’t close a sale until they’re paid off, no matter how many other liens are also on the property.
How Much You Actually Owe
Texas charges penalties and interest on delinquent property taxes starting February 1st, and the total climbs fast — a 6% penalty plus 1% interest the first month, growing to as much as 12% penalty plus accrued interest by July, when many taxing units also add a 15-20% collection fee if the account has gone to a law firm. A bill that started at a few thousand dollars can balloon considerably within a year of going unpaid, so it’s worth getting a current payoff statement from the county rather than assuming the original amount still applies.
Can You Sell With a Lien Still Attached
Yes — you don’t have to pay off the lien before listing or accepting an offer. The lien gets satisfied out of the sale proceeds at closing, the same way a mortgage payoff works, so as long as there’s enough equity to cover it, the sale can proceed without you writing a check beforehand. What you can’t do is transfer clear title while the lien remains unpaid, which is why it comes out of the closing table math rather than your pocket ahead of time.
What Happens at Closing
The title company orders a payoff statement from the taxing authority, and at closing the lien amount is paid directly out of the sale proceeds before anything is disbursed to you. This is standard practice and happens on a large share of closings involving delinquent taxes — it’s not unusual, and it doesn’t hold up the closing as long as the payoff figure is confirmed ahead of time.
If You Owe More Than the House Is Worth
If the lien, plus any mortgage balance, exceeds what the house would sell for, a traditional sale won’t generate enough to clear everything at closing. In that situation your options are negotiating a payment plan directly with the taxing authority to reduce the payoff, a short sale that requires lender and sometimes taxing-unit approval, or letting the county foreclose through a tax sale, which wipes out your equity entirely and is the outcome that costs you the most.
Why a Tax Lien Doesn’t Have to Delay a Sale
Zachary Faris, who works with you, is a licensed Texas real estate agent (TREC #0691730), sponsored by Myers Home Buyers LLC (TREC #9005311). Panda Properties buys houses directly for our own account, in as-is condition, and we’re used to working through payoff statements and lien amounts as part of closing — it doesn’t need to be resolved before we can make an offer. That’s a different transaction than listing, and it’s the right fit for some homeowners and not others; we’re happy to talk through both.
If you have a tax lien on your house and aren’t sure what your options actually are, reach out — we’ll help you figure out where you stand before you decide anything.
Frequently Asked Questions
Will you be listing my home on the MLS or actually buying it?
Great question. Panda Properties buys houses directly for our own account — we’re not listing your home on the MLS as your agent. Zachary Faris, who works with you, is a licensed Texas real estate agent (TREC #0691730), sponsored by Myers Home Buyers LLC (TREC #9005311), but this purchase is a direct sale to us, not a representation of you as a seller. From there, we typically repair the house and resell it or keep it as a rental.
Do you pay fair prices for properties?
Many of the homes we purchase are below market value (we do this so we can resell at a profit to another home owner). We are looking to get a fair discount on a property. However, in our experience, many sellers aren’t necessarily expecting a large “windfall” on the property but rather appreciate that we can offer cash, we close very quickly (no waiting for financing), and no time or effort, or expense is required on your part of fix up the property or pay agent fees. If that’s what you’re looking for and you see the value in getting your house sold fast…let’s see if we can come to a fair win-win price. (Besides, our no-obligation pricing commitment means that you do not have to move forward with the offer we give… but it’s good to know what we’re offering!)
How do you determine the price to offer on my home?
Great question, and we’re an open book: Our process is very straightforward. We look at the location of the property, what repairs are needed, the current condition of the property, and the value of comparable homes sold in the area recently. We take all of that into consideration, along with current local market conditions, and come up with a fair price that works for us and works for you too.
Are there any fees or commissions to work with you?
This is what makes us stand out from the traditional method of selling your house: There are NO fees or commissions when you sell your house to us. We’ll make you an offer, and if it’s a fit then we’ll buy your house (and we’ll often pay for the closing costs too!). No hassle. No fees. We make our money after we pay for repairs on the house (if any) and sell it for a profit (we’re taking all of the risks here on whether we can sell it for a profit or not, once we buy the house from you… the responsibility is ours and you walk away without the burden of the property and its payments… and often with cash in your hand).
How are you different from a real estate agent?
Real estate agents list properties and hope that someone will buy them. The agent shows the properties to prospective buyers if there are any, and then takes a percentage of the sale price if they find a buyer. Sellers who list traditionally often wait weeks or months for the right buyer, financing approvals, and closing — time many homeowners dealing with foreclosure, divorce, or relocation simply don’t have. Oftentimes, the agent’s commission is 3-6% of the sale price of your home (so if it’s a $100,000 home, you’ll pay between $3,000 – $6,000 in commissions to an agent). But that’s where we’re different: rather than listing your home, Panda Properties buys it directly. Zachary Faris, who works with you, is a licensed Texas real estate agent (TREC #0691730), sponsored by Myers Home Buyers LLC (TREC #9005311), but in this transaction we’re the buyer, not your listing agent — we don’t list homes. Since we’re actually the ones buying the home from you, and we pay with all cash…we can make a decision to buy your home within a couple of days (sometimes the same day). Again, we make our living by taking the risk to buy the home with our own cash, repair the home, and market it ourselves to find a buyer (which is the hard part in this market).
Is there any obligation when I submit my info?
There is absolutely zero obligation for you. Once you tell us a bit about your property, we’ll take a look at things, maybe set up a call with you to find out a bit more, and make you an all-cash offer that’s fair for you and fair for us. From there, it’s 100% your decision on whether or not you’d like to sell your home to us… and we won’t hassle you, won’t harass you… it’s 100% your decision and we’ll let you decide what’s right for you.