Washington State Real Estate Practice Exam

Title insurance is typically purchased during the closing process of a real estate transaction. At this stage, the buyer and seller come together to finalize the sale, and it is crucial to ensure that the title to the property is clear of any liens or claims. The title insurance policy provides protection against potential issues with the title that could arise after the closing, such as undiscovered liens or ownership disputes.

Securing title insurance during closing allows the buyer to have peace of mind knowing that they are protected from any future claims against the property’s title, which can save them from significant financial losses. This timing is essential as it coincides with the transfer of ownership, ensuring that all documentation is reviewed and all risks are assessed before the transaction is officially completed.

Acquiring title insurance after the closing date would not provide the intended protection during the period when ownership is transferred, and purchasing it before the contract is signed does not align with traditional practices, as the specifics of the title need to be investigated after a contract is established. While it might be true that some lenders require title insurance as a condition for financing, this does not encapsulate the broader practice of when it is typically purchased in real estate transactions.