Escrow & Title
In New Mexico, when is title to real property considered 'marketable'?
AWhen the property has been inspected and found free of defects
BWhen title is free from reasonable doubt about its validity — clear of undisclosed encumbrances, disputes, and defects that would affect a buyer's quiet enjoyment✓ Correct
CWhen the property is listed on the MLS
DWhen the seller has owned the property for more than 5 years
Explanation
Marketable title is title that a reasonable buyer would accept — free from unreasonable risk of litigation or defects that would impair quiet enjoyment. The purchase agreement typically requires the seller to convey marketable title.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
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.
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.
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