Escrow & Title
Arizona uses the 'race-notice' recording statute, which means that a subsequent purchaser wins in a title dispute if they:
ARecord first only
BHave notice of the prior conveyance only
CBoth record first AND had no notice of the prior conveyance at the time of purchase✓ Correct
DPurchase from a licensed real estate agent
Explanation
Under a race-notice recording statute, a subsequent bona fide purchaser wins over a prior unrecorded claim if (1) they had no notice of the prior claim at the time of purchase, AND (2) they recorded first.
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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.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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