Escrow & Title
In Minnesota, a 'bona fide purchaser for value' (BFP) receives greater protection when buying real property because:
AThey pay above-market prices
BThey paid fair consideration and had no notice of prior unrecorded interests, and they record first✓ Correct
CThey use a licensed real estate agent
DThey obtain title insurance
Explanation
Under Minnesota's race-notice recording statute, a bona fide purchaser for value who had no actual or constructive notice of a prior unrecorded interest and who records their deed first takes title free of that unrecorded prior interest. This encourages recording and provides certainty in real property transactions.
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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).
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.
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