Escrow & Title
In Tennessee, a 'binder' or 'commitment for title insurance' issued by a title company represents:
AA final title insurance policy
BA preliminary report showing the current state of title and conditions for issuing a final policy✓ Correct
CA guarantee that all liens have been paid
DThe title company's appraisal of the property
Explanation
A title commitment (binder) is a preliminary report showing the current state of title, outstanding exceptions, and the conditions the title company requires before issuing the final title insurance policy.
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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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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