Escrow & TitleIntermediateAlabama Exam

A 'gap' in title refers to:

AA period between purchase contract and closing when title is uninsured

BA period in the chain of title where ownership cannot be tracedCorrect

CThe difference between list price and sale price

DMissing property survey data

Why A period in the chain of title where ownership cannot be traced Is Correct

Answer B: A period in the chain of title where ownership cannot be traced

A gap in title refers to a period in the chain of title where the records do not show who owned the property — a cloud on title that may require legal action to resolve.

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

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.

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Key Terms to Know

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.

Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.

Option Contract

A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.

Deed

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

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Property Ownership Guide

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