Property Ownership
In Ohio, which of the following BEST explains why title insurance is purchased at closing?
ATo replace the need for a title search
BTo protect against undiscovered defects, liens, or encumbrances in the title that exist prior to the policy date✓ Correct
CTo guarantee the property's value will not decline
DTo satisfy the lender's appraisal requirements
Explanation
Title insurance protects buyers and lenders against financial loss from title defects that were not found during the title search — errors, forgeries, undisclosed heirs, unpaid taxes, and other hidden risks.
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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.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
Math Concepts
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