Legal
Lien
A legal claim on a property that must be satisfied before the property can be sold with a clear title. A mortgage is the most common lien on a home. Other liens can come from unpaid taxes, contractor work, or court judgments. A title search during the home-buying process identifies any existing liens. All liens must be paid off or resolved before ownership can transfer to a new buyer.
Why It Matters
Lien carries legal significance in real estate transactions. Property law, contract law, and lending regulations all intersect when buying a home, and terms like lien have specific legal definitions that affect your rights and obligations as a buyer or homeowner.
While real estate agents and lenders can explain general concepts, for questions about lien that could have significant financial or legal consequences, consulting a real estate attorney is worth the $200-$500 cost. In some states, attorney involvement in real estate closings is mandatory.
Real-World Example
Legal issues related to lien can surface during title searches, contract negotiations, or closing. Catching problems early is far less expensive than resolving them after you've closed on the property.
Pro Tip
If you're buying in a state that requires attorney closings (CT, DE, GA, MA, NY, SC, WV, and others), your attorney will handle lien-related legal matters. In other states, consider hiring one independently for a review of your purchase contract.