Escrow & Title
In an Oregon transaction, a buyer discovers two days before closing that a lien appeared against the property after the preliminary title report was issued. What should happen?
AClose immediately and deal with the lien post-closing
BThe seller must resolve the lien before or at closing; the title company should update the search and the closing may be delayed until it is cleared✓ Correct
CThe buyer must waive the lien to keep the transaction on track
DThe lien automatically transfers with the property
Explanation
When a new lien appears before closing, the title company should update its search and require the lien to be satisfied before issuing a clean title policy. The seller is typically obligated to deliver marketable title at closing.
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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.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
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