Can You Sell a House With a LienBuffalo NY — Yes, Here’s How

Yes. A lien on a property does not prevent a sale — it must be satisfied at or before closing, but the sale itself can proceed. In a standard real estate transaction in Erie County, the title company identifies all liens during the title search, calculates the payoff amounts, and those amounts are paid out of the seller’s proceeds at closing. You do not need to pay off liens before you can sell.

The most common in Erie County: (1) Property tax liens — unpaid city or county taxes. (2) IRS federal tax liens. (3) Judgment liens — creditors who have won a court judgment can file a lien against your real property in NY. (4) HOA liens for unpaid dues. (5) Mechanic’s liens filed by contractors who weren’t paid — common on WNY’s pre-1970 housing stock where renovation projects get started and stall. (6) Mortgage liens — the most common.

At closing, the title company prepares a settlement statement listing every lien with its payoff amount. Those amounts are deducted from the seller’s proceeds and the title company wire-transfers the payoffs directly to each lienholder. Lien releases are then filed with the Erie County Clerk. You receive whatever is left after all liens are paid.

This is called being underwater or having negative equity. If total payoffs exceed what a buyer will pay, options include: a short sale (lender agrees to accept less than the payoff), negotiating a payoff reduction with lienholders before closing, or in some situations bankruptcy. NCB can walk through the specifics; we’ve navigated complex lien situations across Erie County.

An IRS tax lien is a federal claim against all your property but it doesn’t block a sale — the IRS must be paid from the proceeds. In some cases the IRS will accept less than full payoff to release the lien (a discharge of property from federal tax lien under IRC §6325). This takes 30–45 days and requires coordination. NCB has closed transactions with IRS liens; it’s manageable with proper planning.

Yes. Multiple liens are common in the distressed property sales we handle across Erie County — combinations of unpaid taxes, judgment liens, mechanic’s liens, and mortgage are not unusual. The key variable is whether total payoffs leave any proceeds for you. NCB will be transparent about the math during the offer conversation.

You can search Erie County property records through the Erie County Clerk’s online portal. A title search — which NCB initiates as part of every transaction — provides a complete lien search. Knowing your lien situation before entering a sale negotiation puts you in a much stronger position. Erie County’s online records portal also shows open OBI (Office of Building Inspections) violations and any municipal liens, which can function as encumbrances on title even if not formally filed as judgment liens.