This has happened to me recently. It wasn’t a deal killer for the contractor. I believe in second chances and redemption. However, I did take mental notes, and I did adjust some things with this new knowledge. Property liens work the same way; they don’t always kill the deal, but they certainly change how you approach it. And sometimes … it does kill the deal.

The official statement from the National Association of Realtors concerning definition asserts the following, “A property lien is a legal claim on a person’s property by their creditor to recover an unpaid debt or obligation. Property liens are usually leveraged by creditors who have not been paid. Once a lien is placed on your home, the creditor can foreclose on the house to recover the debt.” Hence, a lien isn’t just some harmless piece of paperwork — it’s a legal claim on your property. These liens have to be cleared or they can grind transactions to a halt and turn your “For sale” sign into a “Good luck” sign.

Liens can rear their ugly heads in different forms. Like unwelcome relatives at Christmas, they tend to show up at the most inopportune times. Of course, the remaining mortgage balance is most likely the primary lien, holding first position against the property. Some of the others don the uniform of unpaid taxes; others show up dressed as contractor disputes. A few even march in waving a court judgment. My personal favorite are the solar panels … showing up like a row of polished shoes at church, they are often thought of as gum on the bottom of said shoe that can just be scraped off and forgotten. But alas, regardless of how they dress for arrival, they all refuse to leave until someone pays them off.

How would one find out if there is a lien on a home? There are a few solid avenues that one can take to clue you in to what kind of liens may be attached to a home. The most obvious would be public records searches. Taking the route of the curious cat, one can meander on down to the county recorder’s office, or even hit a website and get the scoop. Both boring and free since it is a government entity. Spending an afternoon (with snacks and low expectations) will likely result in some level of enlightenment.

Personally, as a real estate professional, I send the address in question (whether I am representing the buyer or the seller in the transaction) to a title company. These are paid professionals who dig through digital cobwebs every day. They’ll run a title search on the property, looking in all the little crook and crannies, sniffing out every dirty little secret the property may hold, ghosts or bodies not included. They use their legal shovels, polished to the hilt with bureaucracy and shining with municipal databases and unearth the entire documented history. They then tie it up in a bow and neatly slap it with the gift tag labeled “title report” just in time for you to question every decision you ever made regarding your home.

Ultimately, the home should not transfer title without all these liens being paid or released, otherwise they will be “conveyed” or transferred over to the new owner. Congratulations, you just bought a home with an attached child support judgement and a set of $60,000 unwanted solar panels with the delightful balance of $58,940 still owed. The panels and the debt … all yours, perhaps with a side of regret for not reading the title report.

The other option would be to read through the title report or have your agent explain it to you. We read these every day. As a result, we can be sure these liens are paid before the transfer … either from proceeds at closing or before settlement. Granted, it is not enjoyable reading, nor is it the slightest bit relaxing, but it saves loads on legal and expensive baggage because the only surprise you need after closing is a secret panel with a winning lottery ticket behind it.

Jen Fischer is an associate broker and Realtor. She can be reached at 801-645-2134 or jen@jen-fischer.com.