What Property Liens Mean for Homeowners and Buyers?

Liens are the sneaky deal-killers in real estate. Imagine falling in love with a home, only to find out it’s tied up in unresolved debt. Or worse, owning a home and discovering someone else has a legal claim against it. Whether you're buying or selling, understanding property liens can protect you from costly delays or outright disasters.

Property liens are claims that creditors or government agencies place on real estate to secure unpaid debts. Buyers must check for these liens before closing to avoid inheriting a financial mess. Sellers should resolve liens early in the process. This guide breaks it all down so you can move forward with clarity.

• Property liens are legal claims on real estate due to unpaid debts or obligations.
• Buyers should always check for liens during the title search.
• Sellers must resolve liens to transfer a clear title.
• Not all liens are deal-breakers, but some are serious red flags.
• Title insurance can help protect you from hidden liens.

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A lien is a legal claim or right against a property, usually as collateral for a debt. If you owe money and stop paying, the creditor can file a lien against your property. Until that lien is cleared, you can't sell or refinance your home.

• Mortgage lien – Created when you finance your home.
• Tax lien – Filed by the IRS or state/local government for unpaid taxes.
• Mechanic’s lien – Contractors or suppliers who haven’t been paid for work or materials.
• Judgment lien – From a lawsuit where the homeowner was found liable.
• HOA lien – When homeowners' association dues are unpaid.

Pro Tip: If you're buying a home, your title company will check for these during the title search, but always ask for a copy of the lien report yourself.

Liens don’t just sit quietly on a title, they can seriously impact your finances and freedom.

Here’s how:

• You can’t sell or refinance until the lien is satisfied.
• Liens can lead to foreclosure in some states.
• A lien on your home can lower your credit score.
• Some liens may include interest and penalties that grow over time.

If you're unsure whether your property has a lien, contact a title company or your county recorder’s office.

When you're buying a home, liens can turn a dream deal into a legal headache. You don't want to inherit someone else's debt.

• Request a title search from a reputable title company.
• Purchase title insurance to protect against undisclosed liens.
• Ask for a lien payoff letter if a lien is discovered.
• Avoid closing until all liens are satisfied and officially recorded as released.

Heads up: Some buyers mistakenly think a home listed on the MLS is “clear.” That’s not always the case. Do your due diligence.

Clearing a lien typically requires full payment or legal action. Here's a simplified step-by-step:

1. Get a payoff amount from the lienholder.
2. Pay the debt (may include interest, penalties, and legal fees).
3. Obtain a lien release or satisfaction of lien document.
4. Record the release with the county recorder’s office.

In rare cases, you may be able to dispute or negotiate the lien if it’s invalid or inaccurate. A real estate attorney can help.

Title insurance is your safety net. It protects you from financial loss if there are hidden or undiscovered liens that surface after you close.

It’s usually a one-time cost, paid at closing, and it can save you tens of thousands of dollars in legal fees or debt settlements later on.

Pro Tip: Always work with trusted professionals like reAlpha Mortgage who ensure thorough title checks and help you avoid surprise lien issues before closing.

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