Title Trouble: How to Know If an Inherited House Has Liens, Loans, or Legal Baggage

You might’ve inherited the family home — but have you inherited a problem?

Many homes passed down through estates come with hidden legal baggage. Unpaid property taxes, old mortgages, liens from contractors, and even judgments can haunt a property title long after the owner has passed.

Here’s what to know — and what to do.

1. Get a Full Title Search

A title search uncovers any debt, lien, mortgage, or legal claim attached to the property. Before you even think about listing the home, this is essential.

🔎 Common issues found:

• Reverse mortgages

• Unpaid taxes

• Utility or contractor liens

• IRS judgments

📘 Real Story: I worked with a family who inherited a home free and clear — or so they thought. Turns out, their late uncle had refinanced it three times in the last five years. The estate owed nearly $190K more than the house was worth.

2. Beware of Reverse Mortgages

Reverse mortgages are common among older homeowners — but heirs often don’t know about them. These loans become immediately due when the homeowner dies. If not repaid quickly, the bank can foreclose, sometimes within months.

💡 Tip: Act fast. Contact the lender and discuss options as soon as you’re notified of the death.

3. Property Tax Liens Can Wipe You Out

If the deceased homeowner didn’t keep up with property taxes, you might be looking at thousands in liens. Some counties will sell the tax debt to third parties who can foreclose quickly.

✅ Step: Call the local tax assessor to check the balance immediately.

4. What If the Title Isn’t Clear?

You may need:

• A quiet title action through probate court

• To pay off liens from the estate before closing

• To delay listing until legal ownership is recorded

🧠 Tip: Work with a real estate attorney and a probate-savvy title company to avoid delays.

5. Protect the Buyer (and Yourself)

Always purchase (and provide) title insurance for the buyer. This protects both parties from title issues that may arise after the sale.

🔗 Want a deeper dive into title searches, reverse mortgages, and common inherited home pitfalls?
👉 Download my free guide to inherited property here.