An unpaid roofer from three summers back can stall a closing today. Liens sit quietly in the public record until a title search drags them out. Then they’re the most urgent thing in your week.
Can You Sell a House with a Lien in Michigan?
A seller in Sterling Heights called me after her buyer’s lender pulled title. It turned up an old medical collection judgment recorded against her name. Closing was eleven days out, and she was sure the sale was dead.
It wasn’t. You can sell a house with a lien in Michigan, and people do it every week across Wayne, Oakland, and Macomb counties. A lien doesn’t strip your ownership of the house or stop you from signing a purchase agreement.
What it does is tie a debt to the property title, so the money gets settled before the deed changes hands.
Nobody says you have to clear every claim before you list the house.
Sellers run into a short list of usual suspects, and I’ve watched the same ones surface again and again. Mortgages and second mortgages top the list, since you agreed to those when you borrowed. Then come the involuntary ones, which often arrive without much notice. Delinquent property taxes, IRS or state tax liens, and past-due homeowners association assessments all show up. So does a construction lien from a contractor who never got paid, or a judgment lien from a court case. Each one lands on the title commitment with a dollar figure attached.
Those items live on the requirements page of the commitment, which the closer works down line by line. Read it yourself instead of trusting a summary email. Sometimes a claim listed there isn’t even yours. Common surnames trigger name-match hits all the time. I once had a judgment against a different John Miller land on a title because the recorded notice had no other detail to tell us apart. Title companies clear those once you show something that separates you from the debtor. It’s a paperwork problem, not a payoff problem.
A title company handles most of the work from there. It orders payoff letters from each lienholder and holds the sale proceeds in escrow. At closing it wires the payoffs, then records the discharges afterward. You walk away with whatever equity is left once the debts and closing costs come off the top. It’s the same process we follow when a homeowner wants to sell a Sterling Heights house fast for cash with a lien still on the title.
Panic almost always outruns the problem. Michigan’s median sale price hit $297,760 in August 2026, up 6.3 percent from a year earlier, according to Redfin’s Michigan market data. That kind of price support means most owners have more cushion than their stomach tells them at 2 a.m. The liens get paid from the proceeds, and you keep the rest.
How Do Liens and Second Mortgages Affect a Home Sale?
Thirty-three days. That was the median time a Michigan home spent on the market in August 2026. A lien payoff rarely adds a day to that if your title work starts early.
Second mortgages and home equity lines complicate the math more than the timeline. Both lenders get paid at closing, in the order their liens were recorded. If the sale price can’t cover both, the junior lienholder has to agree to take less. Sales stall for weeks right at that negotiation.
Expect that lender to ask for a package before it looks at anything. You’ll need the signed purchase agreement and a preliminary settlement statement showing where every dollar goes. Many also want proof of income and hardship. A home equity line usually has to be frozen and closed as part of the sale. Don’t draw on it while you’re listed. Watch for a line you paid down to zero but never closed. The lien stays recorded until the bank releases it, and that release can take longer than the payoff.
Not long ago, two adult children in Roseville called about their father’s rental house. He’d moved into a care facility, and they’d spent a year chasing rent they never signed up to collect. The garage still held three generations of snowblower parts. A small second mortgage from a kitchen remodel sat on top of it all. Nobody could remember if the remodel ever got finished.
Payoff order usually follows recording dates, though property taxes generally jump ahead of private claims. Your title company puts the exact sequence in writing, and that’s the only version that matters at the closing table. I’ve seen sales stall when someone trusted a phone call instead. Don’t take a lender’s word for where it stands in line.
A construction lien has sharper teeth than sellers expect, because the contractor can sue to foreclose on it. Judgment liens work differently. The judgment holder records a notice at the register of deeds and waits. Nobody can foreclose that kind of lien. The debt just has to be paid when you sell or refinance the property.
Buyers notice, too. Redfin found that 29.7 percent of Michigan homes sold above list price in August 2026, so demand is real. Still, a financed buyer’s lender won’t fund a loan against a clouded title. Cash buyers can move anyway, because they underwrite the payoff themselves instead of waiting on an underwriter in another state. It’s one reason a cash sale can fit if you want to sell your Detroit house fast for cash while a lien is still open.
What Should You Do Before Selling a House with a Lien?
Ignoring a lien and hoping it fades away is the worst plan on the menu.
Start with your own title search before a buyer’s title company runs one. A local title company or real estate attorney will do it for a modest fee. Knowing what’s on file against your property early gives you weeks of lead time instead of eleven days of scrambling.
Next, get a written payoff with a good-through date from every lienholder on that report. Numbers given over the phone drift, and paper holds.
Read those payoff letters closely. Details matter. Most carry daily interest, so a figure that was right on the fifteenth is short by the twenty-eighth. If closing slips a week, you’ll need an updated number. Ask each lienholder for wiring instructions at the same time. Also ask how long it takes them to record a discharge once they’re paid. That last question saves real grief. A paid debt that never gets released still shows up the next time anyone pulls title. Set a reminder to confirm the discharges hit the register of deeds a month or two after closing.
An older claim might not be enforceable anymore, so check its date. Under MCL 600.2809, a Michigan judgment lien expires five years after it’s recorded, or sooner if the underlying judgment expires first. A creditor can rerecord it only once. To do that, it has to record a second certified notice at least 120 days before the original expiration date. The court form, Notice of Judgment Lien MC 94, prints the same expiration rule right on its face.
Construction liens run on their own clock. Under Michigan’s Construction Lien Act, a claimant generally has 90 days after last furnishing labor or materials to record the claim of lien with the register of deeds. It then has 15 days after recording to serve a copy on the owner or the owner’s designee. Any suit to enforce the lien has to be filed within one year of recording. A missed deadline can sink it even when the debt behind it is real.
Plenty of collectors will take less than the full balance if you ask. Older judgments and charged-off accounts settle at a discount more often than most people think. That’s especially true when they’re weighing years of waiting against a wire next month. Get any agreement in writing before money moves. Make sure the document says the lien will be released, and not only that the account will be marked settled. A settled balance closes their file, while a release on file is what clears your title.
If the arithmetic doesn’t work, and liens plus commissions plus repairs top what the house will bring, a direct cash sale is worth a real look. Our team at Stoney Creek Home Buyers buys encumbered properties regularly. Sellers tell us they like to see the payoff math on paper before they commit to anything.
What Should Be on Your Michigan Home-Selling Checklist?
A Warren seller came to us with three recorded claims against a duplex and no idea where to start. Six weeks later she closed with a clean title and a check she’d assumed would be swallowed whole.
Order the title search first. Then pull together your paperwork. That means the deed, mortgage statements, contractor agreements, any court papers tied to a judgment, and your latest tax bills. Call your city or township treasurer for the exact delinquent tax balance instead of guessing from an old notice. I’ve seen sellers lowball this number and get blindsided at closing.
Ask the treasurer which year the delinquency started, too. Unpaid taxes get turned over to the county treasurer on March 1 of the following year. The local notice may not cover everything you owe. If the house came to you through a death in the family, add the death certificate and any probate papers to the pile. The title company will want proof you have authority to sign. Landlords should dig out leases and security deposit records. Buyers inherit tenants, and a missing deposit ledger turns into a closing-day argument nobody budgeted time for.
Budget for Michigan’s real estate transfer tax, which the law puts on the seller. Van Buren County’s register of deeds page lays out the rates. The state portion is $3.75 per $500 of value, and the county adds $0.55 per $500. Together that’s about $8.60 for every $1,000 of price, and it comes out of your proceeds at closing.
If your property sits in an association, request a status letter early. HOA balances have a habit of including attorney fees nobody mentioned on the phone.
Then decide how you’re selling. Realtor.com data published by FRED shows 29,277 active listings in Michigan in September 2026, up about 15.8 percent from a year earlier. Buyers have more choices now. Stack a clouded title on top of deferred maintenance, and that extra competition starts to hurt on the open market.
Run the carrying math before you compare offers. Mortgage, insurance, utilities, and taxes keep running through the listing, inspection, and closing periods. Four more months of that is the number sellers leave out when they weigh a retail price against a cash offer. Add the quieter costs while you’re at it. Lawn care and snow removal belong on the list. So do the vacant-home policy your insurer switches you to and the repair credits a buyer’s inspector will ask for.
A homeowner in Wyandotte called after moving her mother into assisted living that spring. The house had a sunroom addition the contractor was never fully paid for, a recorded claim on the title, and a basement full of canning jars. She didn’t want to fight a contractor from two counties away. She wanted it finished before her mother’s next care review, and that was the version of “fast” that mattered to her. You can read more about who we are as a local cash buyer and how we handle houses with claims like hers.
Frequently Asked Questions
What Happens When You Sell a Home That Has a Lien Recorded on It?
The lien gets paid from your sale proceeds at closing, before any money reaches you. Your title company orders payoff statements and pays each creditor in order of priority. Then it records the discharges so the new owner gets clean title. If the price can’t cover everything, you either bring cash to closing or negotiate a reduced payoff with the junior creditors.
How Do You File a Lien Against a Property in Michigan?
It depends on the kind of claim. A contractor, subcontractor, or supplier records a construction lien with the register of deeds in the county where the property sits, inside the Construction Lien Act’s recording window. A creditor holding a court judgment takes another route. The clerk of the court that entered the judgment certifies a notice of judgment lien. The creditor records it with the register of deeds. Both paths carry strict rules, so a consult with a Michigan attorney is worth the fee.
What Taxes Will You Owe When You Sell a House in Michigan?
State and county transfer taxes are the main ones, and the seller owes both. Michigan law says the tax goes to the county treasurer within 15 days after the deed is delivered. Your closing agent handles that. Capital gains may also apply, depending on your profit and whether the home was your primary residence. Some sellers of a principal residence can get the state portion refunded. That mostly happens when the home’s state equalized value hasn’t risen since they bought it. A CPA can tell you which of these apply to you.
What Does a Judgment Lien Mean for You as a Property Owner?
It means a creditor won a court case against you and recorded the judgment in a county where you own property. The lien also attaches to property you buy in that county later. It can’t take your house or force a sale, since Michigan law doesn’t allow foreclosure of this type of debt. What it does is sit on your title until the debt is paid, so the payoff comes due when you sell or refinance. The five-year expiration and one-time renewal rule decide how long it stays enforceable.
If you’re looking at a title report full of claims and aren’t sure what your house is really worth after the payoffs, let’s talk. We’re glad to walk through the numbers with you. Stoney Creek Home Buyers works with Michigan homeowners in exactly this spot. You might sell to us, list with an agent, or decide to stay put, and any of those is fine. Reach out whenever you’re ready. There’s no pressure and no obligation. When you’d like to start, you can contact Stoney Creek Home Buyers with your questions or ask for a cash offer.
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