Escrow & TitleIntermediateAlabama Exam

In Alabama, a title search examines public records to:

ADetermine the property's market value
BVerify the chain of title and identify any liens or encumbrancesCorrect
CConfirm the property's zoning classification, under this approach
DEstablish the property's square footage

Why Verify the chain of title and identify any liens or encumbrances Is Correct

Answer B: Verify the chain of title and identify any liens or encumbrances

A title search examines public records to trace the chain of title, identify any outstanding liens, encumbrances, easements, or other claims that could affect ownership.

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

Easement

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

Encumbrance

Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

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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