Discovering a lien when you're trying to sell or refinance a home or other piece of property can be unsettling. But it doesn't have to be a deal breaker. Here are steps you can take to prevent the problem--or address it when it occurs.
Obtain a copy of your credit report and check it for liens.
If any lien results from outstanding debt, pay it off.
In either case--after the debt has been repayed, in the second--provide written proof that you have satisfied the debt and ask the lender to remove the lien. Be sure to request that they file written documentation that you have met your financial obligation. This is often called a release deed or release of lien.
Store your copy of the document in a safe place. You may need to furnish it in the future to prove that you have made reconveyance, which means you have satisfied the terms for removal of the lien.
Especially if you are dealing with a large lending company that may be overwhelmed with similar lien release requests, you may ask to have the release prepared for recording. When your copy of the document arrives, you will have to take it to the local recorder of deeds yourself to ensure that it becomes part of the public record.