PSI Oklahoma Real Estate Practice Test

What type of lien is considered the highest priority during property sale?

1. Second mortgage

2. Mechanic's lien

3. Real estate tax lien

4. Special assessment lien

The correct answer is: Real estate tax lien

The real estate tax lien is considered the highest priority during a property sale because it is directly related to the government's right to collect taxes owed on the property. Tax liens take precedence over most other liens because they are essential for funding public services and infrastructure. When a property is sold, any outstanding real estate property taxes must be paid first before any other claims against the property are settled. This priority ensures that government entities can efficiently collect taxes, which are fundamental for the operation of public services. Mechanic's liens, while important and enforceable, typically come after tax liens in terms of priority. Similarly, special assessment liens, which are used to finance improvements on properties, also rank below tax liens. Second mortgages are considered subordinate to both real estate tax liens and mechanic's liens. Consequently, the priority established by real estate tax liens plays a crucial role in the overall hierarchy of claims against a property during a sale.