Property Ownership
A Washington property owner has owned their home for 35 years and has paid off the mortgage. The property is free and clear. The owner sells to a buyer using seller financing. Who determines whether the title is clear at closing?
AThe seller certifies the title is clear based on their knowledge
BA title company performing a title search and issuing a title insurance commitment✓ Correct
CThe county assessor's office
DThe buyer's real estate agent
Explanation
Regardless of how long a property has been owned or whether it is free of mortgages, a title company must perform a complete title search to identify any liens, judgments, easements, or other encumbrances. Even older properties may have undiscovered title issues.
People Also Study
Related Washington Questions
- A buyer in Washington purchases a home and does not obtain owner's title insurance. Two years later, a prior unrecorded deed surfaces. The buyer:Escrow & Title
- A Washington seller sells their home without a real estate agent. At closing, the seller discovers there is an old unpaid judgment lien against the property. The title company will:Escrow & Title
- A Washington buyer purchases a property and later discovers that the prior owner had an unpaid IRS tax lien that wasn't paid at closing. The buyer's title insurance policy will:Escrow & Title
- A Washington property owner sells their home and receives net proceeds of $180,000 after the mortgage payoff and closing costs. The seller used the proceeds to purchase a replacement home. For capital gains tax purposes, the seller:Escrow & Title
- A Washington borrower has an existing mortgage with a low interest rate and wants to sell their home to a buyer who would like to take over the payments. The buyer's ability to do this depends on whether the existing mortgage is:Finance
- A Washington buyer purchases a home using seller financing with a land contract. The seller retains legal title. If the buyer defaults, the seller's remedy depends on whether they:Contracts
- A Washington home buyer is using a conventional loan with 20% down and an 80% LTV. Their loan is $480,000 at 6% for 30 years. Using a monthly payment factor of $6.00 per $1,000, what is the monthly P&I payment?Finance
- A Washington homeowner sells their home after 3 years and receives $180,000 in capital gain. They are single. Under IRC Section 121, how much of the gain is excluded from federal income tax?Finance
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.
EasementA non-possessory right to use another person's land for a specific purpose.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Study This Topic
Practice More Washington Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Washington Quiz →