Deeds, title evidence and closing
Transfer of title for the Illinois real estate exam
A buyer signs the loan note, a seller delivers the deed, and a closing agent sends documents for recording. Those are three different jobs. Title-transfer questions become easier when you follow the interest, the document and the stage of the transaction.
Last reviewed:
The short answer
A deed conveys a real-property interest when the required execution, delivery and acceptance are satisfied. Recording serves a different purpose: public notice and protection against specified competing claims. A title search investigates title, a commitment sets proposed insurance terms, and an issued policy protects the named insured subject to its coverage. None of them guarantees the home’s physical condition.
Reviewed October 27, 2026. PSI’s June 24, 2026 outline gives the entire national Transfer of Title domain 6 of the 100 scored broker questions. It includes deeds, title insurance and searches, closing, warranties, foreclosure, short sales and probate. That allocation is not a promise about a particular question type or a score from this practice set. National vocabulary and Illinois rules are identified separately.
Follow the transfer from agreement to public record
- Identify the interest and the person entitled to convey it. The grantor conveys; the grantee receives. Fee ownership, a partial interest, trust title and an estate representative’s authority are different facts. A job title or family relationship does not supply missing authority.
- Separate the agreement from the conveyance. A purchase contract creates contractual rights and obligations and may create equitable interests under applicable law. It is not itself the ordinary closing deed. A deed must identify the parties and property adequately, contain operative conveyance language and satisfy the applicable execution and authority requirements.
- Look for present transfer intent, delivery and acceptance. A signature or acknowledgment alone does not establish all of those facts. Delivery is a legal act supported by intent and conduct, not simply the location of a piece of paper. Conditional escrow delivery needs the actual instructions and facts.
- Read the deed’s covenants. Illinois Section 9 supplies the statutory general-warranty covenants. Section 8’s special-warranty form includes present ownership and power to convey, while limiting the specified encumbrance and defense covenants to matters through the grantor. A quitclaim ordinarily transfers existing legal or equitable interests without those title warranties. None is a roof or appliance warranty.
- Avoid an absolute after-acquired-title shortcut. Illinois Section 10’s ordinary quitclaim reaches then-existing legal or equitable rights and excludes later-acquired title unless added words express that intent. If the grantor has no interest in the stated facts, a bare quitclaim does not create one. Actual warranty, estoppel or added-language issues need their own governing rules.
- Investigate the title before treating it as clear. A search and chain of title help identify recorded transfers, liens and other interests; an abstract summarizes the relevant record history. A title opinion is a legal conclusion, not an insurance policy. Records may be incomplete, and off-record facts can matter.
- Read the commitment and proposed coverage together. Identify the proposed insured, estate, land, amount and effective date, then distinguish requirements to satisfy from exceptions proposed to remain. The commitment is not the issued policy. Actual policy terms, exclusions, exceptions and endorsements determine coverage; an owner’s policy and a lender’s policy insure different interests.
- Compare the contract’s title standard with the insurer’s offer. Marketable title is generally free from reasonable doubt or plausible objections, not necessarily every permitted encumbrance. An insurer’s willingness to issue a policy subject to an exception does not itself establish that the seller has met the buyer’s contract.
- Match each closing document to its job. The deed conveys the real-property interest; a bill of sale handles identified personal property; a note states the repayment promise; the mortgage provides security. A Closing Disclosure reports covered loan terms and settlement figures. An affidavit, transfer declaration or tax receipt does not replace a deed.
- Follow the transaction’s actual closing instructions. The lender, attorneys, title or escrow team, parties and brokers have distinct roles. Confirm required approvals, signatures, funding, payoffs, acceptable releases, deed delivery, disbursement and recording. Their detailed order can depend on the transaction; do not invent one universal signing-to-funding timetable.
- For a covered closed-end mortgage, distinguish receipt of the initial Closing Disclosure at least three business days before consummation from a universal three-day delay for every edit. The regulation’s specific business-day definition applies to that waiting period. A new three-day wait is required for the specified inaccurate APR, loan-product change or added prepayment penalty; other corrections generally have different timing. Cash sales and excluded loan types do not become covered merely because property is changing hands.
- Apply Illinois recording law to the stated competing claimant. Section 30 addresses creditors and subsequent purchasers without notice and the time of filing for record. “Who signed first?” and “who recorded first?” are not complete priority analyses by themselves. Proper filing does not manufacture an absent ownership interest or cure a forged signature.
- For a special transfer, identify the missing legal step. Foreclosure bidding, judicial confirmation and deed delivery are separate. A short sale needs the affected creditor approvals and closing conditions, with lien release and personal-debt waiver distinguished. A probate sale requires the correct representative and powers, not the oldest relative’s signature.
- Choose protection for the problem described. Deed covenants and title insurance concern title. A home warranty commonly means an optional service contract for specified systems or appliances; a builder warranty addresses its stated construction coverage. Read the actual coverage, exclusions, claim procedure and term rather than assuming the word “warranty” promises everything.
| Document | Main job | Check before assuming more |
|---|---|---|
| Purchase contract | Sets the agreed sale obligations | Does not substitute for the closing deed |
| Deed | Conveys the stated real-property interest | Authority, description, delivery, acceptance and covenants |
| Bill of sale | Transfers the listed personal property | Does not convey the parcel |
| Promissory note | States the debt and repayment promise | Does not provide the property lien by itself |
| Mortgage | Secures the debt with the property interest | Does not replace the note or sale deed |
| Title commitment | Sets proposed policy terms and conditions | Requirements, exceptions and effective date |
| Owner or lender policy | Insures the named interest under its terms | Named insured, covered risk and exceptions |
| Closing Disclosure | Reports covered loan and closing figures | Not the deed; not used for every transaction |
| Mortgage release | Documents release of the identified lien | Not automatically forgiveness of separate personal debt |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Contract and deed | An agreement creates obligations and potentially equitable rights; the ordinary closing deed conveys the stated real-property interest. | Promise or interest under contract versus deed conveyance. |
| Grantor and grantee | The grantor conveys the interest; the grantee receives it. | Follow the direction of the transfer, not who pays a fee. |
| General and special warranty | General warranty has broader title covenants. Illinois special warranty also includes present ownership and power; the specified encumbrance and defense covenants are grantor-limited. | Do not turn the “grantor’s period” shortcut into “no promise of ownership.” |
| Quitclaim and warranty | Quitclaim transfers the grantor’s existing interest, if any, without warranty-deed covenants. | The label does not create title the grantor lacks. |
| Delivery and recording | Delivery and acceptance concern operative conveyance; recording affects notice and competing claims. | A valid conveyance between parties is not the same question as third-party priority. |
| Acknowledgment and delivery | Acknowledgment is a separate formal act; it does not by itself prove present transfer intent and acceptance. | Do not let “notarized” answer every deed question. |
| Search, abstract and policy | A search investigates records, an abstract summarizes history and a policy supplies its contractual insurance coverage. | Information about title versus insured risk. |
| Commitment and issued policy | The commitment states proposed coverage and conditions; the issued policy governs the coverage actually provided. | A requirement to clear differs from an exception to remain. |
| Owner and lender policy | Owner coverage protects the insured owner’s interest; lender coverage protects the insured lender’s loan interest. | Paying the premium does not change who is insured. |
| Marketable and insurable title | Marketability concerns the required title quality; insurability concerns the insurer’s coverage terms. | An exception can still need contractual review. |
| Lien release and debt waiver | Removing a lien from the property and releasing a borrower from personal liability are distinct matters. | A short-sale approval must be read for each consequence. |
| Title warranty and condition coverage | Deed covenants concern title; service contracts and builder warranties concern their stated covered items. | An ownership dispute and a failed furnace ask for different protection. |
Work through the facts
A signed deed still in the seller’s control
A seller signs a deed but keeps it in a private drawer. The facts expressly say there has been no delivery, acceptance or present intent to complete the transfer.
- Signing is one event, not every required event.
- The missing delivery and acceptance cannot be supplied by guessing.
Answer: Signing alone has not completed the deed conveyance described. This is not a ruling about a different escrow or trust arrangement.
Effective between the parties, priority still unresolved
A competent owner validly executes and presently delivers a deed; the grantee accepts. No competing claimant is supplied, and the deed has not been recorded.
- The stipulated facts satisfy the conveyance requirements.
- The separate recording and third-party-priority question remains.
Answer: The lack of recording does not, by itself, undo this valid conveyance between the parties. Do not infer protection against every later creditor or purchaser.
A special warranty is not no warranty
The question asks about the Illinois statutory Section 8(b) special-warranty form, without additional limiting language or listed exceptions.
- Read the ownership and power covenant as well as the limited encumbrance and defense covenants.
- “Only during the seller’s ownership” is an incomplete description of every covenant.
Answer: The form includes a present ownership and power-to-convey covenant. Its stated encumbrance and defense covenants are limited to matters through the grantor.
An old mortgage on the commitment
The seller says a prior mortgage was paid. The commitment nevertheless requires an acceptable release of that mortgage before the proposed coverage can issue.
- A remembered payment does not supply a missing record release.
- The question expressly makes acceptable release a requirement.
Answer: Obtain the required release or another acceptable cure through the title and closing team. Do not simply delete the item or substitute a home warranty.
An exception the buyer has not accepted
An insurer offers coverage with a listed easement exception. The contract’s treatment of that easement has not been determined.
- The offer of insurance is subject to the exception.
- The buyer’s contract and the easement’s effect require separate review.
Answer: Insurability alone does not prove performance of the contract’s title requirement. The facts do not establish that every easement makes title unmarketable either.
Foreclosure auction is not deed delivery
The high bidder receives a certificate of sale in an Illinois mortgage foreclosure. The court has not confirmed the sale and no foreclosure deed has been delivered.
- Section 15-1509 distinguishes confirmation, payment, execution and delivery.
- A winning bid or certificate is not the delivered deed.
Answer: Do not say title has passed by foreclosure-deed delivery. The stated statutory sequence is not complete.
A short-sale shortfall
The sale price is $250,000, agreed sale costs are $15,000 and the only secured payoff is $275,000. There are no other funds, credits or liens. The creditor has not approved any concession.
- Available proceeds are $250,000 − $15,000 = $235,000.
- The gap to the stipulated payoff is $275,000 − $235,000 = $40,000.
Answer: The $40,000 gap needs an approved resolution; the arithmetic alone does not create lien release, personal-debt forgiveness or a tax result.
The oldest child is not automatically the estate signer
An owner dies. The oldest child, with no other authority or title facts supplied, says that age alone authorizes signing a deed for the estate.
- Family rank does not establish appointment, title or power.
- Determine the ownership and applicable probate authority before identifying a signer.
Answer: Do not accept age alone as authority to convey the estate’s interest. This does not deny every heir’s possible separate ownership interest.
Confirmation and payment still differ from delivery
In the specified Illinois mortgage foreclosure, the sale is confirmed, the required purchase price and other amounts are paid, and the certificate holder requests the authorized deed. The deed is then properly executed and delivered. The question asks which described event passes title under Section 15-1509(b).
- The confirmation and payment satisfy the stated prerequisites for the deed process.
- Subsection (b) identifies delivery of that deed as sufficient to pass title.
Answer: Delivery is the identified title-passing event. Do not replace it with the earlier bid, or infer that every conceivable surviving claim and appeal issue has disappeared.
Independent authority with a specific-bequest condition
A duly appointed Illinois independent representative is acting reasonably for the estate’s best interests. The will is not inconsistent with the statutory power, but the real estate proposed for sale is specifically bequeathed. No written consent from the legatee has been obtained.
- Section 28-8 permits the specified independent powers without a court order, subject to its conditions.
- Subsection (i) requires the legatee’s written consent for sale of the specifically bequeathed real estate under that power.
Answer: Independent status does not erase the missing written-consent condition. Do not answer either “every probate sale needs a separate court order” or “the representative may ignore the bequest.”
Mistakes to avoid
- “The notary transferred the title.” Acknowledgment does not replace delivery, acceptance, authority or present transfer intent.
- “Special warranty promises nothing about present ownership.” The Illinois statutory form includes ownership and power covenants as well as grantor-limited encumbrance and defense covenants.
- “Quitclaim means defective title.” It describes the interest conveyed and absence of the stated warranties; it does not prove a defect or clear title.
- “First recorded always wins.” Illinois Section 30 requires attention to the protected claimant and notice, not a timing slogan alone.
- “Recording cures a forged deed.” The recorder’s filing does not create the missing genuine grantor authorization.
- “The lender policy protects the buyer because the buyer paid.” Read the named insured and insured interest; owner coverage is separate.
- “A commitment is an issued policy.” Conditions to issuance and the eventual policy coverage are different.
- “Every title exception must disappear.” Check the actual contract, required cures and permitted exceptions.
- “Every closing uses a Closing Disclosure.” Covered transactions use the applicable form; cash sales, reverse mortgages and other exceptions require care.
- “A foreclosure bid wipes out every claim.” The statutory stage, judgment, notice, parties and surviving interests matter.
- “Short-sale approval forgives every debt.” Lien release, personal liability and other creditor approvals need their own terms.
- “A probate sale always needs a separate court sale order.” Qualified independent-representative powers can operate without a court order; the will, statute and consent conditions still matter.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. Which deed ordinarily conveys the grantor’s existing interest, if any, without warranty-deed covenants?
- Quitclaim deed
- Promissory note
- General warranty deed
- Closing Disclosure
Show answer and explanation
Answer: A. Quitclaim deed
Quitclaim conveys the existing interest without those covenants. It neither proves a defect nor supplies an interest the grantor lacks.
2. Which policy protects the named mortgage lender’s insured loan interest?
- Owner’s policy
- Builder warranty
- Lender’s title policy
- Home service contract
Show answer and explanation
Answer: C. Lender’s title policy
Lender title insurance protects the lender’s covered interest. Paying its premium does not make the buyer’s equity the insured interest.
3. In a standard recording question, which act most directly supplies public-record notice of the deed?
- An appraisal
- A loan application
- Proper filing for record
- A roof inspection
Show answer and explanation
Answer: C. Proper filing for record
Recording serves notice and competing-claim functions. This does not make first filing an automatic answer to every Illinois priority dispute.
4. A commitment expressly requires an acceptable release of a prior mortgage. The seller only recalls paying it. What follows?
- Buy a furnace service contract instead
- Obtain an acceptable release or approved cure
- Treat the recollection as an issued policy
- Ignore the requirement
Show answer and explanation
Answer: B. Obtain an acceptable release or approved cure
The title and closing team must address the requirement. Payment and a recorded release are separate facts.
5. Which situation most directly raises the need for short-sale creditor approval?
- The buyer uses a quitclaim deed for another parcel
- The property was listed for only one day
- The seller closes sooner than expected
- Available sale proceeds cannot satisfy the secured payoff and no other funds resolve the gap
Show answer and explanation
Answer: D. Available sale proceeds cannot satisfy the secured payoff and no other funds resolve the gap
Insufficient available proceeds require an approved treatment of the affected secured debt. A fast sale is not what “short sale” means.
6. A seller signs a deed but the facts expressly exclude delivery, acceptance and present transfer intent. Which statement fits?
- Signing alone has not completed this conveyance
- Notarization would cure all missing facts
- Title passes because ink is permanent
- Recording a loan application transfers title
Show answer and explanation
Answer: A. Signing alone has not completed this conveyance
The express facts omit required conveyance events. Do not presume a different escrow or trust arrangement.
7. A valid deed has been delivered and accepted, but is not recorded. No third party is involved. What is the best distinction?
- Conveyance between the parties and protection against competing claims are different questions
- A service contract replaces recording
- The lender automatically owns the parcel
- No unrecorded deed can operate between the parties
Show answer and explanation
Answer: A. Conveyance between the parties and protection against competing claims are different questions
Recording is important, but its absence alone does not undo the stipulated valid conveyance between the parties.
8. Which description of the Illinois statutory Section 8(b) special-warranty form is most accurate?
- It includes present ownership and power covenants with specified grantor-limited encumbrance and defense covenants
- It warrants physical condition forever
- It contains no ownership covenant
- It guarantees against every predecessor’s act
Show answer and explanation
Answer: A. It includes present ownership and power covenants with specified grantor-limited encumbrance and defense covenants
The statute’s ownership and power clause cannot be erased by the usual “seller’s period” shorthand. Read the actual covenants and exceptions.
9. What is the principal function of an abstract of title?
- Repair covered appliances
- Summarize the relevant record history
- Promise repayment of a loan
- Guarantee the buyer’s net profit
Show answer and explanation
Answer: B. Summarize the relevant record history
An abstract summarizes title history. It is not an insurance policy, debt note or condition warranty.
10. A proposed policy will exclude a listed easement. What must be reviewed separately?
- Whether the contract’s title requirements permit that matter
- Whether the seller has a passport
- Whether the deed paper is blue
- The broker’s favorite paint color
Show answer and explanation
Answer: A. Whether the contract’s title requirements permit that matter
The policy offer and contractual title obligation are different. Neither universal acceptability nor universal unmarketability follows from “easement” alone.
11. Which document states the borrower’s repayment promise?
- Owner’s title policy
- Bill of sale
- Promissory note
- Deed
Show answer and explanation
Answer: C. Promissory note
The note states the debt and payment obligation. The mortgage supplies property security; the deed performs the sale conveyance.
12. Which document ordinarily transfers the listed movable personal property at closing?
- Bill of sale
- Loan Estimate
- Title commitment
- Mortgage
Show answer and explanation
Answer: A. Bill of sale
A bill of sale handles the identified personal property. It does not replace the deed for the real-property interest.
13. A buyer receives a lender policy but no owner policy. What does the lender policy itself establish?
- A warranty of all construction work
- Coverage of every furnace breakdown
- Automatic full coverage of the buyer’s equity
- Coverage of the named lender’s insured interest under its terms
Show answer and explanation
Answer: D. Coverage of the named lender’s insured interest under its terms
The named insured and policy terms control. Owner coverage is a separate matter.
14. The commitment has been issued, but its conditions remain unmet and no final policy has issued. What is the best description?
- Every title exception has been removed
- The commitment is the seller’s deed
- A proposed coverage arrangement still has conditions to satisfy
- Every possible title risk is already unconditionally covered
Show answer and explanation
Answer: C. A proposed coverage arrangement still has conditions to satisfy
A commitment is not the issued policy. Identify requirements, exceptions, proposed insured and effective date.
15. An Illinois foreclosure purchaser has a certificate of sale, but no confirmation or delivered deed. Which conclusion is supported?
- The certificate is automatically a general warranty deed
- Every possible lien has vanished
- The facts do not complete the foreclosure-deed transfer sequence
- The buyer can dispense with title review
Show answer and explanation
Answer: C. The facts do not complete the foreclosure-deed transfer sequence
Section 15-1509 requires the identified confirmation and payment steps before the authorized deed process; delivery passes title. A bid or certificate does not supply those missing facts.
16. A short-sale approval releases a lien but expressly reserves a valid personal claim. What should the candidate distinguish?
- A lien and a roof warranty
- A deed and a paint warranty
- A broker and an appraiser
- Property-lien release and personal-debt waiver
Show answer and explanation
Answer: D. Property-lien release and personal-debt waiver
Do not infer a personal-liability release from a lien release where the facts expressly distinguish them. Actual enforceability depends on governing law and the agreement.
17. Who can sign for an estate solely because they are the oldest child?
- Only the oldest son automatically
- Every oldest child automatically
- No one gains estate signing authority from age alone
- Any broker who knows the family
Show answer and explanation
Answer: C. No one gains estate signing authority from age alone
Identify title, appointment and applicable powers. Family rank does not supply authority, and this does not decide every heir’s separate interest.
18. A title question asks about a failed appliance covered by a purchased service contract. Which protection is most directly relevant?
- The lender’s title policy
- The public-record deed index
- The home service contract, subject to its terms
- The deed’s title covenant
Show answer and explanation
Answer: C. The home service contract, subject to its terms
A home warranty commonly means a service contract for listed systems or appliances. Title covenants and title insurance address different risks.
19. Which statement about the Closing Disclosure is accurate?
- It replaces the promissory note
- It is the deed conveying ownership
- It reports covered loan terms and settlement figures, with transaction exceptions
- It is required for every cash sale
Show answer and explanation
Answer: C. It reports covered loan terms and settlement figures, with transaction exceptions
Use the applicable disclosure rules and transaction type. Reverse mortgages, HELOCs and specified other transactions do not use the ordinary Loan Estimate/Closing Disclosure package.
20. A $250,000 sale has $15,000 agreed costs, one $275,000 payoff and no other funds or adjustments. What is the gap?
- $15,000
- $260,000
- $25,000
- $40,000
Show answer and explanation
Answer: D. $40,000
Net available is $235,000. The gap is $275,000 − $235,000 = $40,000. That calculation does not itself forgive debt or release the lien.
21. A valid ordinary Illinois quitclaim has no added language expressing an intent to include later title. What does Section 10 say about after-acquired title?
- The lender’s policy automatically conveys it
- The recorder creates it on filing
- It is always included regardless of the language
- It is not included merely by that ordinary form
Show answer and explanation
Answer: D. It is not included merely by that ordinary form
Section 10 conveys then-existing legal or equitable rights and excludes after-acquired title unless added words express that intention. This is not an all-instruments or all-estoppel ruling.
22. For a covered loan, which correction is among Regulation Z’s stated triggers for a new three-business-day Closing Disclosure waiting period?
- Adding a prepayment penalty
- Changing the moving truck time
- Any dollar change, regardless of the rule
- Any spelling correction, without more
Show answer and explanation
Answer: A. Adding a prepayment penalty
Section 1026.19(f)(2)(ii) specifies an inaccurate APR under the applicable accuracy standard, a loan-product change or an added prepayment penalty. Not every correction restarts the wait.
23. A qualifying independent representative proposes selling specifically bequeathed Illinois real estate under Section 28-8(i). What required consent is identified there?
- No consent, because independent powers override every condition
- Every neighbor’s oral approval
- The broker’s written approval in place of the legatee’s
- The legatee’s written consent
Show answer and explanation
Answer: D. The legatee’s written consent
The specific-bequest condition remains part of the independent power. The opening also requires reasonable action for the estate’s best interests and respects inconsistency with the will.
24. After the required Illinois foreclosure confirmation and payments, the authorized deed is executed and delivered. What event is sufficient to pass title under Section 15-1509(b)?
- The borrower’s first missed payment
- Delivery of the foreclosure deed
- The first lender advertisement
- The auctioneer’s opening bid
Show answer and explanation
Answer: B. Delivery of the foreclosure deed
Subsection (b) identifies deed delivery. Subsection (a)’s prerequisites and authority still matter, and this does not mean every claim is extinguished regardless of notice, judgment or other law.
Common questions
How much of the Illinois broker exam covers transfer of title?
The June 24, 2026 PSI outline assigns the whole national Transfer of Title domain 6 of the 100 scored broker items. It includes deed types, title insurance and searches, closing and special transfers. It does not assign six items to each topic, and this practice set does not predict your live questions.
Does a signed or notarized deed automatically transfer title?
No. The required execution and authority, present transfer intent, delivery and acceptance must be considered. Acknowledgment is a separate act. A deed held for safekeeping and a valid conditional escrow arrangement are not automatically the same. Decide from the actual facts rather than the document’s location alone.
Does an Illinois deed have to be recorded to work between the parties?
Do not confuse valid conveyance with protection against later claims. A validly executed, delivered and accepted deed can operate between the parties before recording. Section 30 separately addresses creditors and subsequent purchasers without notice and the time of filing for record. Recording is important; “first to record always wins” is still too broad.
What does a quitclaim deed guarantee?
Ordinarily, it conveys the grantor’s existing interest, if any, without warranty-deed covenants. It does not guarantee that the grantor owns the parcel or that title is clear, but the label does not prove that title is bad either. Illinois Section 10 also says after-acquired title is not included unless added words express that intention. Read the actual instrument.
What is different about Illinois general and special warranty deeds?
Section 9 provides broader statutory title covenants. Section 8(b) includes present fee ownership and power to convey, while its specified encumbrance and defense covenants are limited to matters by or through the grantor. A special warranty is not “no ownership promise.” The actual deed, reservations, exceptions and applicable law matter, and neither form promises that the building has no defects.
Are a title search, abstract, commitment and policy the same?
No. A search investigates records; an abstract summarizes relevant history; a title opinion supplies a legal assessment. A commitment describes proposed insurance and conditions for issuance. An issued policy supplies its coverage under the actual terms. A complete-looking chain of documents does not rule out every off-record problem.
What is the difference between requirements and exceptions in a title commitment?
A requirement identifies something to satisfy for the proposed coverage, such as a required payoff and release. An exception identifies a matter proposed to remain outside the coverage. Read the actual commitment and contract before assuming every exception must be removed or every requirement can be ignored. A commitment is not the final policy.
Does the lender’s title insurance protect my ownership interest?
The lender’s policy protects the named lender’s covered loan interest. It does not substitute for an owner’s policy, even if the buyer paid its premium. Owner coverage concerns the insured owner’s interest under the actual policy. Policy amounts, covered risks, exclusions, exceptions and endorsements matter; neither policy is a promise about every future event.
Does insurable title always satisfy a marketable-title promise?
No. Marketability generally concerns reasonable doubt or plausible objections under the applicable standard; it does not mean mathematical perfection or absence of every permitted encumbrance. Insurability means willingness to insure on stated terms. A policy offer with an exception does not automatically establish that the seller performed the contract’s title obligation.
What closing documents should I be able to tell apart?
Identify the purchase contract, deed, bill of sale, note, mortgage, title documents and settlement figures by function. For a covered mortgage, the Closing Disclosure reports final loan and closing terms; it is not the deed or note. State and local transfer documents and tax forms can also be required. The ordinary Loan Estimate/Closing Disclosure package does not apply to every loan or a cash sale.
Who handles closing, funding and recording?
The parties, lender, attorneys, title or escrow team and brokers have different tasks. The specific transaction and closing instructions determine who prepares, signs, verifies, receives funds, disburses and records. Do not presume that every signing immediately means funding, recordation, possession and policy issuance have all occurred. Verify each stated event.
When does the Illinois foreclosure purchaser receive title?
Section 15-1509 distinguishes confirmation of sale, payment of the purchase price and other required amounts, the requested authorized deed, and delivery. Delivery of the foreclosure deed is sufficient to pass title. The person executing that statutory deed does not thereby give title covenants. The judgment, notice, parties and other statutory qualifications matter; a bid does not wipe out every conceivable claim.
Does short-sale approval automatically forgive the remaining balance?
No. Approval of reduced sale proceeds, release of the property lien and release from personal liability are separate questions. Identify every affected lienholder and the written approval terms, together with governing law and any applicable loan-program rules. Do not infer a deficiency waiver or a tax result from the word “approved.” The seller still needs the deed and other closing conditions satisfied.
Can any relative sell an Illinois probate property?
No. Identify ownership and the authorized representative’s appointment and powers. Under Section 28-8, a qualifying independent representative acting reasonably for the estate’s best interests has specified powers without a court order, subject to inconsistency with the will. Subsection (i) restricts leasing, sale or mortgage of specifically bequeathed real estate without the legatee’s written consent. Other administration paths have their own requirements. Do not assume either “any heir can sign” or “every sale needs a separate court sale order.”
How is a home warranty different from a deed warranty?
A deed warranty concerns title. A home warranty commonly means a purchased service contract for specified repairs or replacements, often for appliances or systems. A builder warranty addresses stated construction items. Actual coverage and terms vary. There is no universal promise that every product covers every component for ten years, and none replaces title review or a physical inspection.
Are these actual PSI questions or a passing-score predictor?
No. They are original teaching questions with explanations. Use your mistakes to identify a distinction to revisit, then explain why the other options fail. A practice percentage here is not a validated readiness score or a prediction of the exam’s question mix.
Does every Closing Disclosure correction restart a three-day wait?
No. For the covered transactions, Section 1026.19(f) requires receipt of the initial disclosure at least three business days before consummation, with the rule’s specific business-day definition and limited exceptions. A corrected disclosure triggers a new waiting period for the specified inaccurate APR, loan-product change or added prepayment penalty. Other corrections generally have different timing. Do not substitute “the lender sent it” for receipt, treat every small APR change as legally inaccurate or extend the rule to every sale.
Can acknowledgment or recording cure every defective deed?
No. Acknowledgment, recordability, notice, evidentiary proof and substantive validity are separate questions. Illinois Sections 31 and 35c have particular rules about acknowledgment defects and noninvalidity, so “any notary defect automatically voids the deed” is too broad. Those rules do not manufacture genuine authorization, present transfer intent or an ownership interest. Determine the actual defect before selecting a cure.
Keep practising
Your next practice step
Put transfer of title into practice
Distinguish the deed, title evidence and closing step the question actually asks about.
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Official sources and scope
Sources checked through October 27, 2026. The PSI outline supplies the topic allocation. Illinois statutes and the identified published Illinois decisions supply state rules; CFPB explains the consumer documents and coverage distinctions. California DRE material supplies only general title vocabulary, not Illinois recording or probate law. The FTC source explains service-contract and builder-warranty distinctions, not a uniform warranty duration. A review date is not a new effective date.
- PSI June 24, 2026: types of deeds at national IX.A
- 765 ILCS 5/8: the statutory special-warranty covenants
- 765 ILCS 5/9: the statutory general-warranty covenants
- 765 ILCS 5/10: existing interests, later title and the name-change exemption
- 765 ILCS 5/30: filing and the specified third parties
- 765 ILCS 5/31: record notice despite acknowledgment defects
- 765 ILCS 5/35c: acknowledgment and express noninvalidity provision
- 735 ILCS 5/15-1509: the foreclosure deed and its delivery
- Published Illinois decision: In re Estate of Shedrick, 122 Ill. App. 3d 861 (1984)
- Published Illinois decision: In re Estate of Gabbett (2004)
- 755 ILCS 5/20-1 and 28-8: possession, title and qualified independent powers
- 735 ILCS 5/15-1207: written consensual real estate security
- CFPB: checking recorded lien release after payoff
- Regulation Z 1026.19(e) and (f): covered mortgage disclosure timing
- CFPB: owner title insurance
- CFPB: lender title insurance
- CFPB: short sale and written deficiency waiver
- CFPB: review documents before closing
- CFPB: contractual closing documents and disclosure exceptions
- California DRE Reference Book, chapter 5: lien and title vocabulary, with California-specific scope
- California DRE glossary: life estate, freehold, future interests and waste vocabulary
- 215 ILCS 155/3: title-insurance definitions
- FTC: builder warranties and home service contracts
This is exam preparation, not advice for a specific transaction. State law and the applicable facts control. Our editorial and corrections process explains how to report an issue.