Escrow & Title
In Alabama, which document provides the most protection for a buyer against title defects?
AA quitclaim deed
BA general warranty deed combined with an owner's title insurance policy✓ Correct
CA bargain and sale deed
DRecording the deed in the probate court
Explanation
The combination of a general warranty deed (contractual guarantees from the seller) and an owner's title insurance policy (insurance against unknown defects) gives buyers maximum protection against title problems.
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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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
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