What Is Lien?

A lien gives a creditor a legal interest in your property until a debt is satisfied. Common types include mortgage liens, property tax liens, IRS liens, HOA liens, and mechanic's liens from unpaid contractors.

Liens generally have to be cleared before you can sell with clear title. The good news for sellers: liens are usually paid out of the sale proceeds at closing, so you don't have to pay them out of pocket beforehand.

The title company identifies all liens during the title search and handles the payoffs at closing, deducting them from your proceeds. You walk away with whatever remains after the liens and mortgage are satisfied.