Selling an estate property can be a big step, especially when you're handling it after the passing of a loved one. One question that often catches sellers off guard is: what happens when there are liens or judgments attached to the property? And more importantly, who gets the money? Let’s dive into it!

Understanding Liens and Judgments 

Before a home can be sold, any outstanding debts tied to the property must typically be settled.
These can include:

• Mortgage balances

• Tax liens (like unpaid property or income taxes)

• Mechanic’s liens (from contractors who weren’t paid)

• Court judgments (resulting from lawsuits or creditor claims)

Liens and judgments create a legal claim against the property, meaning the estate must satisfy these debts before any heirs or beneficiaries receive proceeds from the sale.

Who Gets Paid First? 

When an estate property is sold, the money from the sale is distributed in a specific order:

1. Closing Costs – Fees like real estate commissions, title insurance, and attorney fees come off the top.

2. Secured Debts – Mortgage lenders or others who have a lien against the property are paid next.

3. Judgments and Other Creditors – After secured debts, any remaining creditors with valid claims are paid.

4. The Estate – Whatever money is left after all debts and fees are paid belongs to the estate and can be distributed to heirs according to the will (or state law if there's no will).

Important: Sometimes liens can be negotiated down. A skilled real estate team and attorney can help facilitate these conversations.

Can the Seller (Executor or Heir) Be Personally Responsible? 

Typically, executors and heirs are not personally responsible for debts — debts are paid from the estate assets. However, it's crucial to work with knowledgeable professionals to make sure all claims are handled properly. Selling a home with liens without addressing them can cause major legal headaches later! 

How to Prepare Before Selling an Estate Property 

• Order a title search early to uncover any unknown liens.

• Consult an estate attorney who can advise on creditor claims.

• Work with an experienced real estate team (us) that understands probate sales and can help you through the process.

Taking these steps ensures a smoother closing and helps you avoid unpleasant surprises.

Bottom Line:
If you’re selling an estate property, it's not just about finding a buyer — it’s about making sure everyone who needs to be paid gets their share before the estate can distribute any remaining assets. Knowing the process can help you navigate it with confidence and protect your loved one's legacy. 

Disclaimer: This information is for general knowledge and informational purposes only and does not constitute financial, tax, or legal advice. We are not lawyers, financial advisors, accountants, loan officers, or mortgage brokers. Please consult with a qualified professional to understand your specific needs.