A lien is a legal claim against a property that secures a debt, and until it's resolved, it can delay or completely stop a home from closing. Liens show up more often in Spokane real estate transactions than most buyers and sellers expect, and finding one partway through a sale can feel alarming. In most cases, it's a manageable, routine part of the process. Here's what a lien actually is, the most common types, and how they typically get resolved before closing.
What Is a Lien?
A lien is a creditor's legal interest in a property that secures their right to be paid, and it stays attached to the property, not the person, until the debt is satisfied. This means a lien can follow a property even after ownership changes hands if it isn't properly resolved beforehand. Liens are recorded with the county and become part of the public record, which is exactly why a title search is such a critical step before closing, it's how liens actually get discovered.
What Are the Most Common Types of Liens?
The most common liens buyers and sellers encounter are mortgage liens, tax liens, mechanic's liens, judgment liens, and HOA liens, each created under different circumstances.
- Mortgage liens: Created when a property is purchased with a loan, giving the lender the right to the property if payments aren't made.
- Tax liens: Filed when property taxes go unpaid, and in Washington, prolonged nonpayment can eventually lead to a tax foreclosure process.
- Mechanic's liens: Filed by contractors or suppliers who weren't paid for work or materials provided on the property.
- Judgment liens: Result from an unpaid court judgment against the property owner, unrelated to the property itself.
- HOA liens: Filed by a homeowners association for unpaid dues or assessments.
Is a Lien Voluntary or Involuntary?
Some liens are voluntary, meaning the property owner agreed to them, while others are involuntary, placed on the property without the owner's consent due to unpaid debts. A mortgage is the most common voluntary lien, since the homeowner agreed to it as part of financing the purchase. Tax liens, mechanic's liens, and judgment liens are typically involuntary, they're the result of a debt going unpaid, not something the owner signed up for directly.
How Does a Lien Affect Closing?
A lien generally must be resolved before or at closing, since most buyers and lenders require clear title, meaning a title free of unresolved claims, before a sale can be finalized. If a title search uncovers a lien, closing doesn't automatically fall apart, but it typically can't move forward until the lien is addressed. In many cases, the lien is paid off directly from the seller's proceeds at closing, with the title company coordinating the payoff so the buyer receives clear title.
What Order Do Liens Get Paid in During Closing?
When multiple liens exist on a property, they're generally resolved in a specific order of priority, starting with property tax liens, followed by mortgage liens by date, then other claims like judgment liens. Title companies and closing agents handle this coordination directly, verifying payoff amounts, including any accrued interest through the closing date, so nothing is left unresolved after the sale completes.
Do Sellers Have to Disclose Known Liens?
Yes. In Washington, sellers are required to disclose known liens on the property using the standard seller disclosure form. This applies to Spokane sellers just like anywhere else in the state, and it's one of the reasons early, honest communication with your agent matters, a lien that surfaces late in the process is far more stressful to resolve under time pressure than one that's identified and addressed early.
Can You Still Sell a Home With a Lien on It?
Yes, homes with liens are sold successfully all the time, but it requires planning and typically means the lien gets paid off using sale proceeds at closing. The specific path depends on the type of lien and how much equity exists in the property. A title company can help identify exactly what's owed and coordinate the payoff, and in situations where the lien exceeds available equity, additional planning with an attorney may be needed.
What Does This Mean for Buyers and Sellers?
For sellers, ordering a title search early, well before listing, can surface a lien issue with enough time to resolve it calmly rather than scrambling close to closing. For buyers, title insurance is what protects you against a lien that wasn't discovered during the search process, which is exactly why it matters even when a transaction looks straightforward.
We're Here to Help
Emiley and Zech at Rios and Co Real Estate work with title companies throughout every transaction to help identify and resolve issues like liens well before they threaten a closing date. If you're concerned about a potential lien on a property you're selling, or want to understand what a title report means for a home you're buying, we're glad to walk through it with you.
About the Authors
Emiley and Zech, Rios and Co Real Estate
Emiley and Zech are Spokane based real estate agents with Rios and Co Real Estate who guide buyers and sellers through the closing process, including working alongside title companies to resolve issues like liens before they become a barrier to closing.
This article is for general informational purposes and does not constitute legal advice. Lien resolution and closing requirements vary by transaction. For guidance specific to your situation, consult your real estate agent, title company, or a licensed attorney.
