### What does the term "Title Risk" refer to in real estate? - [x] Anything that might impede the transfer of a title from one owner to another - [ ] The financial risk associated with taking on a mortgage - [ ] The risk of a property's value decreasing - [ ] The risk of property taxes increasing > **Explanation:** Title risk refers to potential problems or disputes that could interfere with the transfer of ownership from one party to another. These risks can include issues like disputed property lines or claims of ownership by previous owners or third parties. ### Common title claims that affect title risk may come from? - [ ] High interest rates - [ ] Foreclosure processes - [x] Property line disputes and disputed ownership interest - [ ] Mortgage insurance discrepancies > **Explanation:** Common title claims that can affect title risk include property line disputes, where boundaries of the property may be contested, and disputed ownership interest from previous owners who might have a legal claim on the property. ### To mitigate title risk, what step is recommended before finalizing a property sale? - [ ] Securing a low-interest mortgage - [ ] Purchasing homeowner's insurance - [x] Performing a title survey - [ ] Ensuring the property has no liens > **Explanation:** A title survey is recommended before finalizing a property sale to clearly define the boundaries of the parcel being bought and to ensure there are no legal disputes regarding property lines. This can help mitigate title risk. ### What can a land owner from the past do if they have not signed off on the sale of the property? - [x] Make a claim on the property based on past ownership - [ ] Foreclose on the property immediately - [ ] Lower the property taxes - [ ] Change the property's zoning laws > **Explanation:** If a land owner from the past did not sign off on the sale of the property, they may have a legal claim to ownership. This can pose a significant title risk, as they can potentially make a claim on the property based on their past ownership. ### What is one of the legal reasons that might cause a dispute in property boundaries? - [ ] Recent homeowners association decisions - [ ] Declining property values - [x] Unclear or improperly documented survey lines - [ ] Rising property taxes > **Explanation:** Disputes in property boundaries can arise due to unclear or improperly documented survey lines. Ensuring a proper and thorough title survey can help address and mitigate these kinds of disputes. ### Who ultimately bears the responsibility for ensuring the title is clear of risks before finalizing a sale? - [ ] The real estate agent - [ ] The seller - [ ] The lender - [x] The buyer > **Explanation:** The buyer ultimately bears the responsibility for ensuring that the title is clear of risks before finalizing the sale. The buyer should conduct due diligence, such as performing a title survey, to identify and resolve any potential title issues. ### Why is it important for a land buyer to have a title survey done before finalizing the sale? - [ ] To increase the property's value - [ ] To lower the interest rate on the mortgage - [x] To define the boundaries of the parcel and clear any legal claims - [ ] To reduce property taxes > **Explanation:** It is important for a land buyer to have a title survey done before finalizing the sale to clearly define the boundaries of the parcel being bought and to identify and resolve any legal claims or disputes. This helps mitigate title risks. ### What is the primary focus of title insurance? - [ ] Protecting lenders from borrowers defaulting on their mortgages - [ ] Compensating property owners for a decline in property value - [x] Protecting property owners and lenders against title defects and claims - [ ] Covering the cost of property repairs > **Explanation:** The primary focus of title insurance is to protect property owners and lenders against any defects in the title as well as potential claims from third parties, ensuring a smooth transfer of ownership and mitigating title risks. ### What kind of issues can a title survey help uncover? - [ ] High property taxes - [ ] Neighborhood crime rates - [x] Property line disputes and previous ownership claims - [ ] Future market trends > **Explanation:** A title survey can help uncover issues such as property line disputes and previous ownership claims, which are critical for ensuring the title is clear and that the sale can proceed without legal complications. ### What may become a claim on the property at any point in the future, causing title risk? - [ ] A past owner's unpaid utility bills - [x] A past owner's legal claim if they did not sign off on the sale - [ ] A change in neighborhood zoning laws - [ ] A drop in local school ratings > **Explanation:** A past owner's legal claim can become a title risk if they did not sign off on the sale of the property in the past. This could allow them to assert ownership and disrupt the current owner's rights.