What is meant by a "title defect"?

A "title defect" refers to any claim or issue that can challenge or undermine the validity of a property title. This can encompass a range of problems, such as unresolved liens, claims from previous owners, fraud, or inconsistencies in the public records regarding ownership. When a title defect exists, it can create obstacles to selling or transferring the property, as it raises questions about who has the legal right to own and sell the property. A clear title is essential for legitimate ownership and the seamless transfer of property rights.

Understanding this concept is crucial for anyone involved in real estate, as it emphasizes the importance of conducting thorough title searches and obtaining title insurance to protect against potential issues that could arise after a purchase. The other choices do not accurately define a title defect: changes in market value are unrelated to ownership claims, a formal offer is simply a proposal to buy, and a legal document confirming ownership rights describes a title but does not address defects.