Final answer:
To protect against loss from title attacks, buyers can obtain title insurance, which protects against legal claims filed after purchase. Tools like guarantees, warranties, service contracts, and escrow accounts are also used to manage risks associated with imperfect information.
Step-by-step explanation:
One thing buyers can obtain to protect themselves against loss if someone attacks their title is title insurance. Title insurance is a form of indemnity insurance that protects against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans.
It is designed to protect both real estate owners and lenders against potential losses that could arise from a variety of legal claims against the property that may be filed after the purchase.
Mechanisms that reduce the risk associated with imperfect information in transactions include relying on reputations, obtaining guarantees, warranties, or service contracts.
These tools assure product quality or professional competency and act as a form of reassurance for buyers. Similarly, in real estate, buyers use escrow accounts to handle their home insurance and property tax payments as another measure of financial management and protection.