Brian - Great question. This is really a legal question, so I won't be providing any legal insight. However, at a high level any lien on a property "clouds" the title. A property cannot be transferred from one entity (seller) to another (buyer) with a clouded title. The lien would have to be resolved either by having it paid in full, negotiating the price down, or having it waived. The lien holder, in all cases noted, will need to sign a release and have it filed with the Registry of Deeds before closing. Please note that this is in the case of a purchase transaction where the buyer is obtaining financing from a lender. If the buyer is paying cash, the transaction can be "closed" yet the buyer would be taking on the responsibility of paying the lien and clearing the title.
For a full explanation, please consult a real estate attorney.