Where this fits on the exam
| Official syllabus topic | Transfer of Title: Marketability, Title Evidence, and Title Insurance |
|---|---|
| Official PSI area | Transfer of Title |
| Published weight | 6% of the national portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes a weight for the complete official area, not a guaranteed count for this individual comparison. Use the source, document, actor, event, and timing stated in the question before applying a memorized definition.
Side-by-side comparison
Read across each row. The terms are deliberately compared on identical dimensions so the difference remains clear when the exam hides the vocabulary inside a scenario.
| Decision dimension | Marketable title | Insurable title |
|---|---|---|
| Central question | Can title be conveyed without reasonable doubt or material litigation risk under the contract and law? | Will a title insurer issue a policy on stated terms and exceptions? |
| Decision maker | Contract, law, and ultimately a court in a dispute | Title insurer through underwriting |
| Defects | Material unresolved defects can defeat marketability | Insurer may exclude, except, insure over, or require cure of a defect |
| Exam warning | Does not promise perfect title | A policy offer does not automatically make title marketable |
Decision rule
Georgia-specific distinction
Worked example
Scenario. A title company offers a policy that expressly excludes a disputed access claim, while the purchase contract requires marketable access rights.
Reason it through. The insurer's willingness to issue a policy with an exception does not decide whether the seller met the contract's marketable-title requirement.
Answer. Title may be insurable on limited terms while marketability remains disputed.
Common exam traps
- Equating insurable with marketable
- Treating marketable title as flawless title
- Ignoring policy exceptions
- Asking a licensee to give a legal title opinion
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1A title insurer will issue a policy but lists an exception for an unresolved boundary dispute. The purchase contract requires marketable title. Which statement is correct?
- A. Title is marketable, because a policy will be issued
- B. Title is insurable with an exception, yet may be unmarketable
- C. Title is neither insurable nor marketable due to the exception
- D. Title is marketable once the licensee reviews the survey
Show answer and explanation →
Answer: B. Title is insurable with an exception, yet may be unmarketable
Insurable title means an insurer will issue coverage on its stated terms, while marketability depends on the contract and the law. An insurer can except a risk that still leaves reasonable doubt about title. Equating insurable with marketable is the trap.
- A. Incorrect. Issuing a policy does not settle marketability. The insurer may exclude the very dispute that creates material doubt.
- B. Correct. The insurer will provide coverage with an exception. The unresolved boundary dispute may still fail the contract's marketable-title requirement.
- C. Incorrect. An insurer willing to issue a policy establishes insurability on those terms. An exception does not automatically make issuance impossible.
- D. Incorrect. A licensee's survey review does not resolve a legal title dispute or determine marketability under the contract.
Question 2Which statement about marketable title is accurate?
- A. It is title free of reasonable doubt, not perfect title
- B. It means the record shows no exceptions of any kind
- C. It exists whenever a title insurer will issue a policy
- D. It is decided by the listing broker's title search
Show answer and explanation →
Answer: A. It is title free of reasonable doubt, not perfect title
Marketable title is reasonably free from material doubt and litigation risk; it does not have to be flawless. Minor matters such as ordinary recorded easements do not automatically defeat it. Treating marketable title as perfect title is a common misconception.
- A. Correct. Marketable title is reasonably free of material doubt and litigation risk. It need not be perfect in every respect.
- B. Incorrect. An ordinary disclosed easement or other acceptable exception does not automatically defeat marketability. Materiality and contract terms matter.
- C. Incorrect. Insurance willingness and legal marketability are separate. A policy can exclude a risk that still makes title unmarketable.
- D. Incorrect. A listing broker's search cannot substitute for legal title analysis. Georgia counsel and the governing contract and law control.
Question 3In a typical Georgia residential closing, who examines title and often issues title insurance as an agent of an underwriter?
- A. The listing broker
- B. The buyer's lender
- C. The county clerk
- D. The closing attorney
Show answer and explanation →
Answer: D. The closing attorney
Georgia closings are conducted by attorneys, who examine title, identify or resolve exceptions, and commonly issue title insurance as agents of an underwriter. The lender relies on that work but does not perform it. A licensee should never give a legal title opinion.
- A. Incorrect. The listing broker handles brokerage services, not the closing attorney's legal title examination.
- B. Incorrect. The lender may require and rely on title work. It is not the typical attorney responsible for this legal closing function.
- C. Incorrect. The clerk records documents and maintains public records. Recording is not an attorney's title opinion or issuance of insurance.
- D. Correct. The closing attorney performs the legal title work in the typical Georgia transaction and may act as an agent for a title insurer.
Ready to move on?
You have this distinction down when all of these are true.
- Define every compared term without using the other term as the definition.
- Rebuild the comparison table from memory.
- State the decision rule and Georgia distinction without notes.
- Solve the worked example after changing one key fact.
- Explain the rule or fact that makes each distractor wrong.
- Answer all three original questions correctly in mixed practice on a later day.
Recommended next lesson
Continue with Actual Notice Versus Constructive Notice. Title evidence depends on the public record, and Actual Notice Versus Constructive Notice explains why a properly recorded instrument binds a buyer who never searched the records.
Return to the complete exam-concept library or the Transfer of Title hub.