Definition
Marketable title is clear and free from serious defects that a reasonable buyer would accept. It means the property can be readily sold, financed, or insured without title concerns.
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Marketable title goes beyond clear title—it's title that a buyer can be confident in and that a lender will accept for financing. Minor irregularities that don't significantly impact ownership may not affect marketability, but title defects, clouds, and serious liens do. Courts and title companies use marketability standards to determine whether sellers have fulfilled their obligation to deliver good title.
Pro Tip
Ensure you can deliver marketable title. Sellers are contractually obligated to provide it at closing.
Example
A property with clear title and no significant encumbrances or defects is considered to have marketable title.