Affiliate Broker Tennessee (TN PSI) National Practice Exam `

What factors should be considered regarding property title during a purchase?

1. Only the seller’s reputation

2. Market trends and demographics

3. Defects or issues affecting title insurability

4. The physical location of the property

The correct answer is: Defects or issues affecting title insurability

When considering property title during a purchase, it is crucial to analyze defects or issues affecting title insurability. Title insurance protects the buyer and lender from potential defects in title that may arise after purchase, such as liens, encumbrances, or ownership disputes. A thorough examination of the title can reveal any legal issues that could affect the buyer’s rights to the property. Ensuring that the title can be insured without defects is fundamental to a secure and clear transaction. The other factors presented, such as the seller's reputation, market trends, demographics, and the physical location of the property, are important in their own right but are not directly related to the title itself. Seller reputation pertains more to trustworthiness during the transaction, while market trends and demographics relate to property value and desirability, and the physical location affects property use and value but does not influence the state of the title. Hence, considering title defects directly addresses the legal legitimacy of ownership, making it a pivotal aspect of the purchase process.