How can a title defect affect a property sale?

Prepare for the Title Insurance Producer Independent Contractor Exam. Enhance your knowledge with flashcards and multiple choice questions with hints and explanations. Ace your exam with confidence!

A title defect can significantly hinder a property sale or reduce the property's saleability if it is not resolved prior to the transaction. Title defects may include issues such as liens, unresolved ownership claims, or inaccuracies in the property description. These problems create uncertainty regarding the legal ownership of the property, which can deter potential buyers.

When buyers are aware of such defects, they may be less inclined to proceed with a purchase, fearing future legal complications or financial losses. Even if a buyer is interested, they may demand a lower price to offset the perceived risks associated with the defects. Therefore, having a clear and marketable title is crucial for facilitating a smoother real estate transaction. Resolving title defects before a sale not only ensures legal clarity but also enhances the overall saleability of the property, making option B the correct answer.

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