Escrow & TitleIntermediateAlabama Exam

A buyer purchases an owner's title insurance policy. This policy protects the buyer:

AOnly during the purchase transaction

BFor as long as the buyer or their heirs have an interest in the propertyCorrect

CFor 10 years from the date of issuance, as is typical in most transactions

DUntil the property is refinanced

Why For as long as the buyer or their heirs have an interest in the property Is Correct

Answer B: For as long as the buyer or their heirs have an interest in the property

An owner's title insurance policy is a one-time premium policy that protects the buyer and their heirs for as long as they retain an interest in the property.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

People Also Study

Key Terms to Know

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Easement

A non-possessory right to use another person's land for a specific purpose.

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Property Ownership Guide

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