Hello,
I have just recently started to get into tax lien sales and I went by a few properties that are listed on the auction site and two of the properties with tax liens have for sale signs in their front yard. How can they sell their house if they owe taxes? Did they file for a lien discharge because they are selling the house? If this is the case, who pays the taxes?

The person who owns the property can pay the back taxes anytime until the morning of the acution to keep their property, at least in every state I have bought propertyies, only about 10 percent of the listed properties actually sell at the court house steps.

Also remember that in some states you do not get a deed to the property buy only a tax certificate and the current owners have up to 3 years to redeem their property by merely paying you the tax money plus interest plus any improvements you have done.

But if there are taxes due on the homes at closing the taxes will have paid from the proceeds at closing.

... How can they sell their house if they owe taxes? ...

If they can sell them, the taxes will be paid from the proceeds of the sale.