A marketable title is a defect-free real estate title that can be transferred without issues. A title search determines if a title is marketable, and both buyers and sellers prefer it. Disputes can arise, but a court will enforce the contract if the title is marketable. However, a marketable title doesn’t guarantee that there are no title claims or issues.
A marketable title is a real estate title that is free of defects that could be discovered by a prudent buyer. It is considered more or less “perfect” and there are no reasons why the title cannot be transferred. Marketable title is the gold standard in title quality. It should be noted that “marketable” in the sense of the title has nothing to do with “marketable” in reference to ownership; A property with a marketable title can still be difficult to market, and conversely, a property with a cloudy title can be very marketable.
The people involved in a real estate transaction determine whether or not a title is marketable by conducting a title search. This title investigation looks at the history of the title and the chain of owners and events associated with the title. If the title is completely clear, free of liens, claims, and other issues, it is considered marketable. It can also be considered “insurable,” meaning it has some defects, but a title insurance policy could still be written.
Both buyers and sellers generally want marketable title in a real estate transaction. From the point of view of both, when a title is marketable it means that there should not be problems with the legal transfer of the title that would hinder the deal. Once the buyer and seller agree to the terms of the sale, in other words, title can be transferred without a hitch.
When disputes arise during a real estate transaction, whether the title is marketable, the court will rule to enforce the contract. Buyers may be forced to buy property with marketable title if they try to back out of an agreement unless they can show there is a compelling reason not to buy, such as a defect with the property that was discovered during property inspections.
It is important to note that when a title is marketable, it simply means that a reasonable or prudent buyer will not be able to discover problems with the title. This does not necessarily mean that there are no title claims or other issues that may arise in connection with the title. When a title is clouded, there are steps that can be taken to resolve the problem so that the title can be transferred to allow the deal to be finalized.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
