PSI Oklahoma Real Estate Practice Test

When a house has multiple liens, which lien is prioritized for payment from the sale proceeds?

1. Mechanic's lien

2. First mortgage

3. Real estate tax lien

4. Special assessment lien

The correct answer is: Real estate tax lien

In real estate, the prioritization of liens when a property is sold follows a specific order of payment from sale proceeds. The real estate tax lien is given the highest priority. This means that if a property is sold, any outstanding real estate taxes owed will be settled first from the sale proceeds. The prioritization stems from the principle that tax revenue is crucial for government operations, and thus, tax liens must be cleared before any other claims can be satisfied. While other liens, such as mortgages and mechanic's liens, also hold significance, they are subordinate to the demands of the government for unpaid taxes. As a result, once the real estate tax lien is settled, then subsequent liens will be addressed in an order based on their recording dates and specific statutes applicable to them.