What does the term "clear title" refer to in real estate?

"Clear title" refers to a title that is free from any liens or disputes. In real estate transactions, having a clear title is crucial because it means that the property is not encumbered by any legal claims, such as mortgages, tax liens, or disputes over ownership. This status provides both the buyer and the seller with confidence that the transaction is secure and that the buyer will have the full legal right to the property without facing potential legal challenges.

When a title is clear, it signifies that all ownership interests have been settled and that the seller has the legal authority to transfer ownership. This is why buyers typically seek assurances or conduct title searches as part of their due diligence before making a purchase, as discovering any encumbrances could complicate or even jeopardize the transaction.

In contrast, the other options describe scenarios that indicate complications with a title. Multiple ownership claims, outstanding debts, or pending verification suggest that the title is not clear, which could lead to legal disputes or financial liabilities for the new owner.