PSI Oklahoma Real Estate Practice Test

Which document serves as proof of ownership in real estate transactions?

1. A sales agreement

2. A title deed

3. An application for title insurance

4. A property disclosure statement

The correct answer is: A title deed

A title deed is the document that serves as proof of ownership in real estate transactions because it officially conveys the legal title of a property from one party to another. When a buyer purchases a property, the seller transfers their interest in the property through a title deed, which contains vital information such as the legal description of the property, the names of the buyer and seller, and any relevant conditions or restrictions. The title deed is recorded in the public records, which helps establish clear ownership and can be referenced to resolve any disputes about property ownership in the future. It is a fundamental document that signifies the buyer's rights to the property, including the ability to use, rent, or sell it. Other documents mentioned, such as a sales agreement, serve different purposes. A sales agreement outlines the terms and conditions of the sale but does not transfer ownership. An application for title insurance pertains to the buyer's request to insure against potential claims or defects in title but does not itself prove ownership. A property disclosure statement is a document provided by the seller detailing the condition of the property; it aids in the transaction but does not serve as proof of ownership.