Escrow & Title
A title search reveals a mechanic's lien on the property from an unpaid contractor. At closing, this lien is typically:
AIgnored if it is more than one year old
BPaid off from the seller's proceeds so the buyer receives clear title✓ Correct
CTransferred to the buyer as a condition of sale
DAssumed by the buyer's lender
Explanation
Liens must generally be satisfied before a clear title can be conveyed. The seller is responsible for paying off any existing liens (including mechanic's liens) from closing proceeds so the buyer receives marketable title.
Related Alabama Escrow & Title Questions
- Proration at closing refers to:
- A quiet title action in Alabama is a court proceeding used to:
- A title insurance policy that protects the lender's interest is called a:
- A mechanic's lien arises when:
- What is the purpose of title insurance in a real estate transaction?
- A deed that conveys property 'to John Smith and his heirs' creates which type of estate?
- Recording a deed in Alabama protects the buyer by:
- A special warranty deed in Alabama is one in which the grantor warrants the title against:
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