Question
nnnnWhich of the following is generally demanded in every sale of real property in California?
nnnnSelections
nnnnA. A warranty deed
nnnnB. An abstract of title
nnnnC. A policy of title insurance
nnnnD. A trust deed
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Answer: C
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5 Keys Summary
nnnn• A policy of title insurance is generally demanded in every sale of real property in California.
nnnn• Title insurance acts as a contract of indemnity, protecting against financial losses or damages caused by defects in the past chain of title history.
nnnn• Lenders typically require a clear title policy to be in place before they will fund a loan.
nnnn• Unlike a trust deed, which is only a security instrument for a loan, title insurance is demanded regardless of whether the property is financed or sold for cash.
nnnn• An abstract of title is merely a summary of recorded documents and does not provide the financial protection against title defects that a title insurance policy offers.
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