California Real Estate Practice Exam

The standard title insurance policy assumes what about the property buyer?

1. The buyer has not inspected the property

2. The buyer should trust the seller's disclosure

3. The property owner can inspect the property before buying it

4. The buyer is responsible for zoning issues

The correct answer is: The property owner can inspect the property before buying it

The correct answer reflects the premise that a standard title insurance policy allows for the property owner to inspect the property before finalizing the purchase. This inspection is a critical component of the buying process, as it enables potential buyers to verify the property's condition and be aware of any issues prior to closing the deal. Title insurance itself protects against losses arising from issues with the title, but it does not replace the need for a thorough inspection. Buyers are encouraged to conduct their due diligence, which includes physically inspecting the property. In contrast, the alternative choices do not accurately represent the assumptions made by title insurance policies. For instance, assuming that the buyer has not inspected the property does not align with the proactive approach encouraged in real estate transactions. Similarly, trusting the seller's disclosure without further verification is not advisable, as disclosures can sometimes be incomplete or misleading. Additionally, while the buyer may have some responsibility for understanding zoning issues, a standard title insurance policy does not primarily assume that the buyer is tasked with these concerns. Instead, it focuses on ensuring protection against defects in the title itself.