You're not the only one dealing with both
When money gets tight, it rarely affects just one bill. I regularly talk with homeowners who fell behind on their mortgage and, around the same time, got behind on property taxes too, sometimes because the county tax bill isn't wrapped into their monthly payment and it's easy to lose track of during a hard stretch. If that's where you are, I want you to know upfront: it doesn't disqualify you from selling. It just means there are a couple of extra pieces to account for at closing.
How back taxes actually get handled at closing
Delinquent property taxes are a lien against the property, similar in concept to your mortgage, and they typically get paid off out of the sale proceeds at closing, right alongside your mortgage payoff. The title company handles this as part of the closing process, making sure all liens against the property, including the county's tax lien, are cleared so the buyer receives clear title.
This means the back taxes don't need to be paid out of pocket before you can list or sell the home in most cases. What matters is whether the home's sale price is enough to cover the mortgage payoff, the back taxes, any other liens, and closing costs. If it is, you'll still walk away with proceeds after everything is settled, just a bit less than if there were no back taxes involved.
When the numbers get tighter
If you're behind on both the mortgage and property taxes, there's a real chance the sale proceeds won't fully cover everything owed, especially if you're also underwater on the mortgage itself. In that case, the same short sale process that applies to an underwater mortgage typically needs to account for the tax lien as well, since it has to be resolved before the county will release its claim on the property.
This is exactly the kind of scenario where getting a clear, honest number early matters. I usually walk through the math with homeowners using a net proceeds estimate, factoring in the mortgage balance, tax delinquency amount, and estimated selling costs, so we know from the start whether we're looking at a straightforward sale or a more involved negotiation with the lender.
Why waiting makes this worse, not better
Property tax delinquency compounds through interest and penalties that continue to accrue the longer the balance goes unpaid, and in more serious cases counties in Virginia have the ability to pursue tax sale processes on properties with significant delinquent tax debt. That's a separate track from mortgage foreclosure, but it adds real pressure to the situation and another reason not to let things sit.
If you're already dealing with a mortgage in default, adding an unresolved tax delinquency to the mix just shortens your effective timeline to act. I've written about how much time you generally have before foreclosure in Virginia, and it's worth reading with the understanding that tax issues can move on their own separate clock.
Selling during pre-foreclosure with tax debt attached
The good news is that selling remains one of the most direct ways to resolve both problems at once. A completed sale clears the mortgage lien and the tax lien in the same closing, and you're no longer carrying either obligation forward. I've covered the broader mechanics of selling in this situation in can I sell my house during pre-foreclosure, which applies just as much when taxes are part of the picture.
The key difference with back taxes involved is disclosure and coordination. Your agent and the title company need to know about the tax delinquency from the start, not discover it during the title search, so it can be factored into pricing conversations and the closing timeline from day one.
Speed matters even more in this situation
Because you're managing two separate clocks, the mortgage default timeline and the tax delinquency timeline, moving quickly to get the house on the market and under contract puts you in a much stronger position than waiting to see which issue becomes urgent first. If you're trying to understand how fast a sale can realistically move, I've written specifically about how fast you can sell a house to stop foreclosure, and much of that same urgency applies here.
Get the tax office and a housing counselor involved too
Your local commissioner of revenue or treasurer's office can tell you exactly how much is owed, what penalties or interest have accrued, and what their specific timeline looks like before any further collection action, since this varies by locality and by how long the taxes have been unpaid. A HUD-approved housing counselor can also help you think through how the tax debt interacts with your mortgage default and what order of priorities makes sense for your situation.
Don't assume you know the payoff amount on the tax side any more than you'd assume you know the exact mortgage payoff. Get both numbers in writing before you set expectations about what a sale will net you.
How I help when both issues are in play
When a homeowner comes to me dealing with a mortgage default and back property taxes at the same time, my first step is getting real numbers on both sides, the mortgage payoff and the tax payoff, so we can figure out honestly whether a standard sale covers everything or whether we're heading toward a short sale negotiation. From there we move as quickly as the situation calls for.
If this is where you're at, reach out and let's get a clear picture together rather than you trying to untangle two separate agencies and a mortgage servicer on your own. You can also read more broadly about your options on my pre-foreclosure resources page.
