In real estate, what is a lien?

In real estate, a lien refers to a legal claim on a property that gives a creditor the right to keep possession of the property until a debt owed by the property owner is satisfied. This means that if the property owner fails to pay their debts, such as a mortgage or taxes, the creditor can potentially take action to recover the owed amount through liens. Liens are an important aspect of real estate transactions as they can affect ownership and the ability to sell or refinance the property.

Understanding the nature and implications of a lien is essential for anyone involved in real estate, as it outlines the priority of claims against the property and provides essential protections for creditors. In contrast, the other options describe unrelated concepts in real estate finance, such as mortgage agreements, property valuation methods, or lease contracts, which do not capture the legal implications of a lien.