How to Check for Liens on a Property for Free

You think of all the red flags to watch out for when buying a house for yourself or an investment, but did you think about liens on the property? It’s something most homebuyers miss and don’t realize it until the title company can’t clear the mortgage to close because the owners owe money to someone else. I found this out the hard way when I tried to buy a property only to find out in the final hour it had a $100,000 lien on it.

Fortunately, you can check for liens on a property several ways so you know long before the closing if there may be any issues. Here are the different methods you can use to check for liens before choosing a property.

How to check for liens on property

Knowing how to check for liens on a property is essential whether you’re buying a house for yourself or want to start real estate investing.

You can check for liens by contacting the local county, using an online lien search tool, or getting help from a title company, which is my favorite way.

1. Contact the local county

Liens are usually public record once they are filed and public records are available for anyone to see.

How you access these records varies by state, but one of the most common methods is by contacting the property's county. This can be done in person, over the phone, or online. This step may involve a learning curve and a lot of patience, so be aware.

Here’s how:

• Visit or call the county clerk or recorder’s office to inquire about specific properties.
• Access property liens online, where available and save the time necessary to visit a county clerk’s office or call them and sit on hold.

2. Use an online property lien search tool

If you’d rather not sift through public records yourself, you can use an online search tool to help. There are various easy-to-use options available that can simplify your search.

For example, it’s free to create an account on PropertyShark.com, and you get one free property report that shows a wealth of information for any valid address, including any liens on the property. This works well if you’re interested in a single property and it works out for you.

Otherwise, you have to subscribe to get more than one report. Pricing varies by region but typically starts around $50 to $60 per month.

You can also request detailed reports from USTitleRecords.com. You don’t need to create an account or subscribe to anything with this service. Simply choose a report, enter an address, and pay a flat fee for your report. It costs $95 per property lien report.

3. Get help from a title company

Title companies are third parties that can help lenders and buyers navigate important parts of the homebuying process. This includes:

• Researching the history of property owners
• Performing a title search
• Ensuring the property title is clean of any liens

You may hire a title company or agent to help when you don’t have the expertise or time to do the necessary research yourself. Hiring a title company is typically not a legal requirement, but many buyers do it because title agents can help ensure everything is smooth while buying a home.

If you’re financing the purchase of the potential property, your mortgage company will eventually work with a title company on the transaction, but if you want to know about liens sooner, you can get a head start.

What to do if you find a property lien

Finding a property lien isn’t necessarily the end of the world, but there are a few things to be aware of, depending on if you find a lien on your own home or a house you want to buy.

Finding a lien on your own property

Finding a lien on your own property is cause for some concern, but it may not end up being a big deal.

• A paid-off lien: Simply contact the party responsible for the lien — the lienholder — to have it released. This may involve using a lien release form and providing proof you paid the debt.
• A lien that hasn’t been paid off: If you owe the debt, see what you can do about paying it. Be sure after you do that you request a lien release because it’s not usually automatic.

Keep in mind that you cannot refinance or sell the property without satisfying the lien so the sooner you take care of it, the better.

Finding a lien on a property you want to buy

If you find a lien on the property you want to purchase, it’s not automatically a deal-breaker. Here’s what you can do:

• Clear the lien. The most straightforward option is to get the lien paid off. Typically, this is the seller’s responsibility, but you should follow up to ensure it’s cleared so it doesn’t come back to haunt you.
• Negotiate a deal. If the seller doesn’t want to pay off the lien, you may negotiate with them for a lower sale price in exchange for you taking care of the lien.

Typically, having the seller pay off the lien is the better option since you don’t want to take on the responsibility of the debt, but if you can work it out in the sales price, it works out the same.

What is a property lien?

A property lien is basically a legal claim against your property for a debt you owe. Common liens you may see include mortgages, tax liens, mechanic’s liens, and judgment liens.

What types of liens are there?

Liens often come in three categories:

1. Voluntary liens

Voluntary liens are agreements between two parties, which is why they’re sometimes called consensual liens. Common types of voluntary liens include home mortgages and car loans.

When you use a mortgage to finance a house, the lender agrees to give you money to buy the house, while using the house as collateral. If you don’t repay the loan as agreed, the lender can take the property and sell it.

2. Statutory liens

Statutory liens result from state or federal law breaches. For example, you can have a tax lien placed on your property when you don’t make federal tax payments to the IRS.

Statutory liens are superior to other types of liens, such as voluntary liens or judgment liens, because they are created by statute, which means they have priority over other claims to the property. This means these liens are paid off first if a property is sold or foreclosed on and they must be paid off before any other liens on the property.

Some real estate investors place their money in statutory liens, such as tax liens, by purchasing tax lien certificates that local governments sell. This effectively transfers ownership of a lien from the original creditor to the investor. This form of investment may be profitable when a homeowner pays off what they owe or when the real property is foreclosed.

Learn more about how to invest in tax liens.

3. Judgment liens

A judgment lien is a type of legal claim against a property that a court grants creditors as a way to collect an owed debt. The courts can place the lien on your property if someone wins a lawsuit against you because you owe them money.

Judgment liens are often called involuntary liens because they aren’t something both parties agree to and you’re unlikely to be able to sell or mortgage a property until the judgment lien is paid off or expired.

Each state’s laws differ regarding how long the liens can last, on average, though, they last five to twenty years and in some states can be renewed.

FAQs

Bottom line

If you own property or plan to purchase one, you must know how to check for liens on them. When buying property, it’s essential to know if a property has liens so you know what type of debt you’re in for or what legal action you might face.

If you own property, checking for liens periodically ensures your home is lien-free and that you can refinance or sell the property as you wish.

Checking public county records is usually the first step, but online property lien search tools or title companies can also help.