Oregon 30-Hour Real Estate Law Practice Test

What entity is responsible for conducting a title search before a title insurance policy is issued?

1. The title insurance company

2. A real estate broker

3. The county clerk

4. A notary public

The correct answer is: The title insurance company

The title insurance company is responsible for conducting a title search before a title insurance policy is issued. This process is crucial because it helps to verify the ownership of the property and uncovers any liens, encumbrances, or claims against the title that could affect ownership rights. The title search typically involves examining public records, such as deeds and mortgages, to ensure that the title is clear and marketable. The title insurance company then assesses the results of the search to determine the risk associated with insuring the title and provides coverage to protect against any future claims or issues that may arise. While other entities like real estate brokers and notary publics play important roles in real estate transactions, they do not conduct title searches. Similarly, the county clerk manages public records but does not carry out the searches or issue title insurance policies themselves. Therefore, the title insurance company is best positioned and legally responsible for this critical step in the real estate closing process.