A marketable title is a property title without defects that could be discovered by a prudent buyer. A title search is performed to determine if a title is marketable. Both buyers and sellers want a marketable title to ensure a smooth transfer of ownership. Even if a title is marketable, there may still be claims against it.
A marketable title is title to a property that has no defects that could be discovered by a prudent buyer. It is considered more or less “perfect” and there is no reason why title cannot be transferred. The marketable stock is the gold standard in stock quality. It should be noted that “marketable” in the sense of title has nothing to do with “marketable” referring to the property; a property with negotiable title can still be difficult to market and conversely a property with tarnished title can be very salable.
People involved in a real estate transaction determine whether or not a security is marketable by performing a title search. This title investigation examines the history of the title and the chain of owners and events associated with the title. If the title is completely clear without liens, claims and other issues, it is considered marketable. It may also be considered “insurable,” meaning it has some flaws but a title insurance policy could still be written.
Both buyers and sellers usually want a marketable title in a real estate transaction. From both sides, when a title is marketable it means that there shouldn’t be any issues with the legal transfer of the title that would get in the way of a deal. Once the buyer and seller have agreed on the terms of the sale, in other words, title can be transferred without any problems.
When disputes arise during a real estate transaction, if the title is marketable, the court will decide to enforce the contract. Buyers may be compelled to purchase a property with marketable title if they attempt to renege on an agreement unless they can demonstrate that there is a compelling reason not to buy, such as a defect in the property discovered during property inspections.
It’s important to note that when a stock is marketable, it simply means that a reasonable or prudent buyer would be unable to discover problems with the stock. This does not necessarily mean that there are no claims against title or other issues that may arise with respect to title. When a title is obfuscated, steps can be taken to resolve the issue so that title can be transferred to enable the deal to close.
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