Escrow & Title
A title search reveals an unsatisfied judgment lien against the seller. At closing, this lien would typically be:
AIgnored, as it does not affect the transfer of title
BPaid from the seller's proceeds to clear the title before or at closing✓ Correct
CTransferred to the buyer as their responsibility
DRemoved by the title company without any payment
Explanation
Judgment liens must be satisfied (paid off) to deliver clear, marketable title. The outstanding lien is typically paid from the seller's net proceeds at closing so the buyer receives unencumbered title.
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Key Terms to Know
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.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Math Concepts
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