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Residential TradingTitle InsuranceMEDIUM

What is the primary benefit of title insurance for a residential property buyer?

Correct Answer

B) It protects against financial loss due to title defects or ownership disputes

Title insurance protects the insured owner against financial loss from title problems that existed at closing but were not found, such as undisclosed liens, encroachments, survey errors, fraud or ownership disputes. The policy typically pays covered losses and the legal costs of defending or clearing the title.

Answer Options
A
It guarantees the property will increase in value over time
B
It protects against financial loss due to title defects or ownership disputes
C
It provides coverage for major structural repairs needed after purchase
D
It ensures the buyer can obtain mortgage financing at favorable rates

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Background Knowledge for Residential Trading

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Key Terms

title insurancetitle defectsownership disputesliensencroachments
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