An encumbrance is something that may prevent a buyer from taking the legal title or possession of the property. Most encumbrances are recorded at the county recorder's office.

Sometimes a piece of property can be sold subject to a mortgage or other financial lien. A buyer can check whether a piece of property has a lien or mortgage through the county recorder's office. Additionally, a title insurance company should inform you of any such encumbrances on the property.

A buyer may not have enough cash up front to pay the entire purchase price for a piece of property. A financial institution may be able to lend the buyer the purchase money and attach a mortgage to the property. For more information on real estate financing, see Mortgages