Under the TREC contract, the seller is required to deliver the property free of all liens except those assumed by the buyer. If a judgment lien is discovered against the seller, the seller must:
Correct Answer
A) Pay off the judgment before closing or arrange for it to be paid from closing proceeds
The seller must clear all liens, including judgment liens, before or at closing. The seller can pay off the judgment before closing or arrange for it to be paid from the closing proceeds through the title company.
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Related Topics & Key Terms
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Related Concepts
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.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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