When you purchase real estate, it is most important to be cautious and take due diligence in checking everything that is related or connected to that property. This means that you check for outstanding mortgages as well as any financial or tax liens on the property. It can become your responsibility if the lien is tied to the property and the person prior. If you, as a potential buyer, come up with anything, you have a couple of different options in handling the matter.

First, you can walk away. With respect to the seller or the seller’s agent, you should share what information you found out about the property. They may not be aware of anything themselves. It could have been an old issue they thought had been taken care of or an x-spouse may have taken a loan using it as collateral. It is not always necessarily a fact they were trying to hide anything.

Your next option is to pay the lien off and then assume ownership. If it is a tax lien, each state has different laws on the length of time that must pass before you can take ownership of the property. If it is a financial lien, it may take some time for the lender to gather the record and clear the lien before signing over the title to you as well. Should you take this option and pay off the lien, have your realtor negotiate the price down to cover your expense.

Sometimes there can be cost associated with doing the searches for these liens. However, there are ways to avoid those costs and still get the information you need. You can work with a reputable real estate agent and they have the connections to look at the MLS for any property you may have interest in purchasing. The MLS should detail any lien information. Real estate agents make up to three percent from the buyer side and three percent from the seller side on these transactions. This MLS information is free to them.

If you are shopping for a house on your own without a realtor, you can still check for liens yourself and for free. First make sure you have the correct address of the property you’re considering. Verify this information by checking the street sign and confirm it matches the number on the curb or mailbox. You can get this information without stepping foot on the property so that you aren’t arrested for trespassing.

Use the local newspaper to search for a mortgage lien on the property. Since most states require public notice of a foreclosure sale, this is where you find those houses that are being sold at foreclosure auctions.  Most of these notices are placed at least 21 days prior to the sale.

You can also check the County Assessor or local Tax Board. These two entities’ can provide information that is available in public records. This information will included the name(s) of all owners present and past, if the property taxes are paid up to date as well as the last date for the property sale. If a tax lien is listed, the county assessor should be able to advise you where to investigate this lien for more information.

You most definitely don’t want ownership of a property and then find out later that money is owed by the previous owner. So take the time if you’re not working with a realtor and do your homework. If you are working with a realtor, ask them if they have checked all records for liens. Once you have found the home you want and went through this process, you will be able to enjoy your home in peace knowing that everything is right.