Where this fits on the exam
| Official syllabus topic | Marketable Title Versus Insurable Title |
|---|---|
| Official PSI area | Transfer of Title |
| Published area weight | 6% of the national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.
The lesson
Marketability
Marketable title need not be perfect, but material claims, uncertain ownership, significant encumbrances, or probable litigation can make it unmarketable under contract and law.
Insurability
An insurer may issue coverage while excluding a known matter or requiring a cure. Willingness to insure does not prove the buyer must accept every exception.
Other title terms
Legal title is formal ownership, equitable title describes beneficial or contract-based rights, and record title is what public records show. These terms answer different questions.
Objection and cure
The contract normally sets the title-evidence deadline, permitted objections, seller cure period, acceptable exceptions, and remedies if the defect remains.
Decision rule
Georgia-specific distinction
Worked example
Scenario. An insurer offers a policy but excludes a disputed driveway easement that is essential to access, while the contract requires marketable access rights.
Reason it through. Insurance with an exception leaves the key risk outside coverage and may not meet the contract's separate title standard.
Answer. The issue requires title objection and cure analysis under the contract; policy availability alone is not enough.
Common exam traps
- Equating insurable with marketable
- Demanding perfect title
- Ignoring policy exceptions
- Missing objection deadlines
Original practice questions with detailed explanations
These questions were written for instruction and mapped to the current 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 a disputed driveway easement that is the home's only access. The contract requires marketable title. What follows?
- A. Title is marketable because an insurer will cover it
- B. The buyer may object under the contract's title terms
- C. The buyer must close because no title is perfect
- D. The insurer must remove the exception before closing
Show answer and explanation →
Answer: B. The buyer may object under the contract's title terms
Insurable and marketable are different standards: an insurer can issue a policy while excepting the very risk the contract requires the seller to cure. Because the excepted easement is the only access, it is a material defect the buyer can raise through the contract's objection and cure process. Equating insurable with marketable is the trap.
- A. Incorrect. A policy can except the disputed access right, so willingness to insure does not settle marketability.
- B. Correct. The sole-access dispute is material and can be raised under the contract's title objection and cure terms.
- C. Incorrect. The buyer's duty to close depends on the contract's title requirements and remedies, not acceptance of any defect.
- D. Incorrect. The insurer can retain an exception; it is not automatically required to eliminate the underlying dispute.
Question 2The title exam shows a recorded utility easement along the back lot line, and the buyer's contract lists it as a permitted exception. Is title still marketable?
- A. No, marketable title must be free of every encumbrance
- B. No, any easement gives the buyer a right to cancel
- C. Yes, but only if the insurer removes the easement
- D. Yes, an accepted minor easement does not defeat it
Show answer and explanation →
Answer: D. Yes, an accepted minor easement does not defeat it
Marketable title need not be perfect; it must be reasonably free of material doubt and litigation risk. An ordinary utility easement the contract already accepts does not create that doubt, so demanding perfect title is the mistake.
- A. Incorrect. Marketable title can include agreed encumbrances that do not create material doubt.
- B. Incorrect. An easement accepted as a permitted exception is not automatically a cancellation right.
- C. Incorrect. The contract already permits this easement; removing it from title insurance is not required to make that accepted title marketable.
- D. Correct. An ordinary, accepted utility easement does not by itself defeat marketable title.
Question 3Between contract and closing, the buyer holds rights under the signed purchase agreement while the seller still holds the deed. What kind of title does the buyer hold?
- A. Equitable title
- B. Legal title
- C. Record title
- D. Marketable title
Show answer and explanation →
Answer: A. Equitable title
Equitable title describes beneficial or contract-based rights, such as a buyer's rights under a signed purchase agreement. Legal title, the formal ownership, stays with the seller until the deed is delivered, and record title is simply what the public records show.
- A. Correct. An enforceable purchase agreement can give the buyer equitable or beneficial rights before the deed transfers.
- B. Incorrect. Legal title generally remains with the seller until valid deed delivery and acceptance.
- C. Incorrect. Record title describes ownership shown in public records, rather than the buyer's purchase-contract rights.
- D. Incorrect. Marketable describes title quality, rather than the type of interest held before closing.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Marketable Title Versus Insurable Title in one clear answer without notes.
- Separate Marketability from Insurability using a fresh example.
- Apply the decision rule to a new fact pattern and name the fact that controls the result.
- State the Georgia-specific point or explain why the national rule applies unchanged.
- Answer every practice question and explain the rule each rejected option misapplies.
- Revisit this topic later in mixed practice without category labels.
Recommended next lesson
Continue with Closing, Recordation, Parties, and Transfer Timing. Next, closing and recordation follows the file to the closing table, where title requirements are satisfied, the deed is delivered, and recording gives public notice, with a Georgia attorney overseeing the conveyance.
Return to the Transfer of Title hub to see every official branch and the complete lesson sequence for this content area.