A licensee in Kansas is preparing a purchase agreement for a buyer client. The buyer asks the licensee to include a clause requiring the seller to provide a clear title at closing, free of all liens and encumbrances. The seller's property currently has a mortgage. Which statement correctly describes how this situation is typically handled in a Kansas residential purchase agreement?
Correct Answer
B) The purchase agreement typically requires the seller to pay off the existing mortgage at or before closing so that clear title can be delivered to the buyer
In Kansas residential real estate transactions, purchase agreements routinely include a requirement that the seller deliver marketable or clear title at closing, free of liens and encumbrances except those specifically agreed to by the buyer. An existing mortgage on the property is a lien that the seller is expected to satisfy at or before closing — typically using proceeds from the sale. This is standard practice in Kansas real estate transactions and is fully consistent with Kansas contract law.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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