A buyer who pays cash for a property and does not obtain title insurance is:
Why Taking a risk because there is no protection against unknown title defects Is Correct
Answer B: Taking a risk because there is no protection against unknown title defects
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
People Also Study
Related Alabama Questions
- A special warranty deed warrants title only against defects arising:Escrow & Title
- A special warranty deed in Alabama is one in which the grantor warrants the title against:Escrow & Title
- In Alabama, which document provides the most protection for a buyer against title defects?Escrow & Title
- An Alabama title insurance company that discovers a previously unknown prior deed would:Escrow & Title
- A deed that conveys 'all the grantor's right, title, and interest' without any warranty is a:Property Ownership
- When a seller provides a warranty deed with a covenant against encumbrances, they are promising that:Contracts
Key Terms to Know
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Math Concepts
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →