Exam vocabulary · quality of title

What Is Marketable Title in Real Estate?

Definition

Marketable title is title free of reasonable doubt and serious defects, so an informed buyer would accept it and a lender would lend on it. It does not mean perfect: recorded easements and restrictions may remain, while an open lien, a gap in the chain or a boundary dispute makes title unmarketable.

How the exam tests marketable title

These mirror the phrasing you will see on test day. Answer them, then read the explanation whether or not you got it right.

Marketable Title: exam questions1/1

Transfer of title

Marketable title means title that is:

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Every marketable title question, answered

Every question above with its correct answer and the reasoning behind it. Read the explanations for the ones you answered correctly too. A lucky guess and knowing the rule look identical on a score report. These are sample questions from our larger bank.

1. Marketable title means title that is:
- AInsured under an extended coverage policy of title insurance
- BRegistered under a Torrens land registration system
- CCompletely free of every conceivable encumbrance, lien, and recorded restriction
- DFree from reasonable doubt and acceptable to a well-informed, prudent buyercorrect
Why: Marketable title is "Free from reasonable doubt and acceptable to a well-informed, prudent buyer", so ordinary utility easements do not destroy it. Demanding title free of every encumbrance sets a standard almost no real parcel could meet.
Transfer of title

Where marketable title sits in the exam vocabulary

The exam most often tries to catch you by putting marketable title next to equitable title. Each of those is a real concept sitting close enough to be tempting, and the question usually turns on the single feature that separates them rather than on the definition of either one. Read the contrast, not the term.

Related exam terms

Often confused with

equitable title

Marketable Title belongs to the quality of title family of exam concepts. When it is solid, take the free real estate exam prep or browse the full real estate exam vocabulary.