Can You Sell a Home With a Tax Lien in Colorado?

A tax lien on a home can complicate a property sale, but it does not disqualify you from selling altogether. Many homeowners in Colorado face tax liens due to unpaid property taxes, financial difficulties, or unexpected expenses. The good news is that you can sell a home with a tax lien, but the process requires working with the right buyer who understands how to navigate these challenges. Whether you want to sell your house fast in Boulder or need a consultation with a cash home buyer in Golden, OOAK Homes helps you resolve tax debt and sell your home quickly, avoiding foreclosure, credit damage, and other legal complications.

How Property Tax Liens Work in Colorado

How Do Tax Liens Work?

In Colorado, property taxes are assessed annually. If a homeowner does not pay their property taxes by the deadline, the unpaid amount becomes a lien against the home. This lien gives the local county the legal right to collect the unpaid taxes, plus interest and penalties. If the debt remains unpaid for too long, the county can sell the tax lien to an investor. This gives them a claim on the property until the taxes are paid.

What Happens If You Don’t Pay Property Taxes?

Counties in Colorado hold tax lien sales to recover unpaid taxes. Investors purchase these liens, essentially paying the taxes on behalf of the homeowner. In return, they receive interest on their investment, and if the homeowner does not repay the debt within a set time, the investor can begin the process of acquiring the property. In some cases, homeowners may face losing their home through a treasurer’s deed sale if the lien is not resolved.

Can You Sell a Home With a Tax Lien?

Yes, homeowners can sell a home with a tax lien, but the lien must be addressed before the sale is finalized. In most cases, the simplest way to handle this is by using the proceeds from the home sale to pay off the outstanding tax debt at closing. However, this process can be complicated, especially if the lien is substantial or if multiple liens are attached to the property.

Selling a home with a tax lien requires coordinating with the county tax authority or other lienholders to determine the exact amount owed, including interest and penalties. If the lien exceeds the property's value, homeowners may need to negotiate a settlement with the tax agency or explore other solutions. Some lenders or tax authorities may be willing to accept a lower payoff amount to avoid the lengthy foreclosure process.

Working with a cash home buyer like OOAK Homes simplifies the process because we handle the lien negotiations directly. Instead of homeowners struggling with bureaucratic red tape, we work with tax agencies to reach a resolution and ensure the lien is cleared at the time of closing. This means sellers can walk away free from tax debt, without worrying about additional legal complications or delays.

A significant advantage of selling to a cash buyer in this situation is the speed of the transaction. Traditional sales may take months, and any unresolved lien issues can derail a deal at the last minute. Cash buyers eliminate the uncertainty by closing quickly—often within a few weeks—providing sellers with financial relief while avoiding foreclosure or further penalties.

Selling a Home With a Tax Lien in Colorado

How Do You Pay Off a Tax Lien When Selling?

When selling a home with a tax lien, the outstanding debt must be settled before ownership can be transferred. The most common approach is to pay the lien from the proceeds of the home sale at closing. A title company will verify that the lien is cleared so the buyer receives a clean title.

What If the Sale Price Doesn’t Cover the Lien?

If a home’s value does not fully cover the tax lien and other debts, homeowners have a few options:

• Negotiating with the tax authority to reduce penalties and interest
• Settling with the lienholder to accept a partial payment
• Working with an experienced cash buyer like OOAK Homes, who can help structure a deal to satisfy the lien while still providing financial relief

How Long Do You Have Before Losing Your Property?

In Colorado, when a tax lien is sold at auction, the homeowner enters a redemption period, which typically lasts three years from the date of the sale. During this time, the homeowner has the right to pay back the delinquent taxes, plus interest and penalties, to reclaim full ownership of the property. If the debt remains unpaid after the three-year period, the tax lien investor can apply for a treasurer’s deed, which grants them legal ownership of the home.

While homeowners technically have three years to redeem their property, waiting too long can be risky. Interest on unpaid taxes can grow rapidly, making it harder to catch up. Additionally, if the homeowner is also behind on mortgage payments, the lender may proceed with foreclosure before the redemption period ends, accelerating the loss of the home. Acting quickly to settle the tax debt—either through repayment, negotiation, or selling the property quickly for cash—can help homeowners avoid foreclosure and protect their financial future.

The Risks of Ignoring a Tax Lien

Potential Foreclosure and Property Loss

Unpaid property taxes can lead to foreclosure. If tax authorities or lienholders initiate foreclosure proceedings, homeowners may lose their property without receiving any proceeds from the sale. Acting quickly is the best way to avoid losing a home to tax foreclosure.

Credit Damage and Legal Consequences

Tax liens appear on credit reports and can significantly lower credit scores. A lien judgment can remain on a homeowner’s record for up to 10 years, making it harder to secure loans, buy another home, or refinance existing debt.

Increasing Interest and Penalties

The longer a tax lien goes unpaid, the more expensive it becomes. Interest rates on tax liens can be as high as 9–12% per year. This, as well as additional penalties, make it increasingly difficult to catch up. Selling quickly prevents these extra costs from accumulating.

How OOAK Homes Helps Homeowners With Tax Liens

We Keep Your Mortgage Current During Closing

One major advantage of working with OOAK Homes is that we continue mortgage payments during the closing process to prevent further damage to a seller’s credit. This ensures that homeowners do not face additional penalties or foreclosure while waiting for the sale to finalize.

We Work With the County to Resolve Tax Debt

We have experience negotiating with county tax offices and lienholders. Whether dealing with unpaid property taxes, mortgage delinquency, or other financial obligations, we handle all negotiations to ensure a smooth closing process without legal complications.

Close Fast and Walk Away Debt-Free

Traditional home sales can take months, and tax lien situations often require a fast resolution. OOAK Homes closes in as little as seven days, and this allows homeowners to walk away from tax debt and financial stress without waiting for a long, uncertain market sale.

Selling to a Cash Buyer vs. the Traditional Market

No Delays From Mortgage Lenders

Traditional buyers often require mortgage approvals, which can delay or even prevent the sale if tax liens are involved. Cash buyers eliminate this issue because there is no need for lender approval.

No Realtor Commissions or Hidden Fees

Working with a real estate agent means paying commissions, closing costs, and sometimes additional fees. Selling to a cash buyer removes these expenses, allowing homeowners to keep more of the proceeds from their sale.

No Need for Repairs or Inspections

Many traditional buyers avoid homes with tax liens, and even those willing to buy may require inspections and repairs before closing. A cash buyer purchases properties as-is, meaning there are no out-of-pocket costs for the seller.

Can You Sell a Home With a Tax Lien in Colorado? Yes – Start Today

If you are struggling with unpaid property taxes, facing foreclosure, or dealing with a tax lien that threatens your financial future, selling your home quickly for cash in Denver can provide relief. OOAK Homes specializes in helping homeowners in Thornton, CO, and surrounding areas, including Northglenn, Federal Heights, and Eastlake. Our team ensures a fast, fair, and stress-free sale, allowing you to clear tax debt and move forward without legal or financial burdens. Contact us today for a no-obligation cash offer within 24 hours and take control of your financial future.