Understanding Liens in Real Estate Transactions

What options do the buyer and seller have when a lien is found during a title search?

Final answer: A lien found during a title search indicates a claim on the property due to unpaid debt. The buyer and seller can negotiate for either party to pay the lien, or a portion of the purchase price could be held in escrow until it's settled.

Explanation:

In the context of a real estate transaction, the discovery of a lien during a title search can present complications. A lien is a legal claim or right against a property to secure payment of a debt or an obligation, which must be paid off when the property is sold. This could be a mortgage lien, a tax lien, or a lien for unpaid contractors, among others.

Upon discovery of a lien, the attorney should notify both the buyer and the seller. The seller could opt to pay off the lien prior to selling the property. Additionally, the buyer and seller could potentially negotiate an agreement where a portion of the purchase price is held in escrow until the lien is settled. Another option might be for the buyer to assume responsibility for paying the lien, although this scenario is less common and may not be legally viable in all places.

Talk with a real estate attorney or professional to understand all the potential implications and strategies to deal with a lien on a property.