A slang phrase describing the situation of someone when he or she gains outright ownership of an asset, such as when it is completely paid off and no creditor has a claim on the property.
The phrase is probably most commonly used in reference to one's mortgage. If your house is completely paid off, you own your house "free and clear."

In the case of real estate, before a sale can occur, the property must be "free and clear" so the buyers know that there are no prior claims on it.