Wisconsin Real Estate Sales Practice Exam

During a real estate transaction, gaps in title may be covered by?

1. A standard policy

2. A gap endorsement

3. A quitclaim deed

4. A warranty deed

The correct answer is: A gap endorsement

A gap endorsement is specifically designed to cover potential issues related to gaps in title during real estate transactions. These gaps often arise between the time a title search is completed and the closing of the transaction. A gap endorsement provides additional coverage for the title insurance policy to protect buyers and lenders from risks that might arise within that interim period, effectively closing the window where issues could potentially surface. Other choices, while related to title issues, serve different purposes. A standard policy offers broad title insurance protection but does not specifically address the gap between the title search and closing. A quitclaim deed transfers whatever interest the grantor has in the property but does not guarantee that the title is free from defects. Similarly, a warranty deed provides a guarantee that the title is clear of defects but does not specifically cover gaps in title that could occur after the title search is conducted. Therefore, a gap endorsement is the appropriate choice to ensure coverage for those specific risks.