Question

The property seller says that there are no liens or other encumbrances on his property, but only has a grant deed to convey. The title company will proceed with a title search, however, to ensure there are no clouds on the title. A __________ would have guaranteed that the title has no defects or clouds on it.

Answer 1

Title insurance would have guaranteed that the title has no defects or clouds on it.

Step-by-step explanation:

A title insurance policy would have guaranteed that the title has no defects or clouds on it. Title insurance is a type of insurance that protects the buyer and their lender from financial loss due to defects in the title or any undisclosed liens or encumbrances on the property. It is often obtained during the closing process and provides coverage for as long as the buyer owns the property.

For example, if the seller claimed there were no liens on the property but it was later discovered that there is a mortgage lien, the buyer can file a claim with the title insurance company to cover the costs of resolving the issue.

By obtaining a title insurance policy, the buyer can have peace of mind knowing that they are protected against any unforeseen title issues that may arise.