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Table of Contents:

• What is a Preliminary Title Report?
• Why Do You Need a Preliminary Title Report?
• How is a Preliminary Title Report Created?
• What Should You Look for in a Preliminary Title Report?
• What Happens After You Receive a Preliminary Title Report?

What is a Preliminary Title Report?

A preliminary title report is a document that provides information about the ownership of a property, any liens or encumbrances on the property, and any other issues that may affect the title. It is typically created by a title company or a real estate attorney and is used during the home buying process.

The report is considered "preliminary" because it is not a final determination of the state of the title. It is based on a search of public records and other sources, and it is possible that additional issues could arise later on.

Why Do You Need a Preliminary Title Report?

There are several reasons why you should obtain a preliminary title report before buying a property:

• To uncover any issues with the title: The preliminary title report will identify any liens, judgments, or other encumbrances on the property. This information can help you decide whether to proceed with the purchase or negotiate with the seller to have these issues resolved before closing.
• To ensure clear title: A clear title is essential when buying real estate. If there are any issues with the title, it can lead to legal problems down the road. The preliminary title report can help ensure that the title is free and clear.
• To obtain title insurance: Most lenders will require you to purchase title insurance to protect their investment in the property. A preliminary title report is necessary to obtain title insurance.

How is a Preliminary Title Report Created?

To create a preliminary title report, the title company or attorney will conduct a search of public records, including deeds, mortgages, and other documents related to the property. They will also search for any liens, judgments, or other encumbrances on the property.

The search may also include other sources of information, such as tax records and zoning records. Once the search is complete, the title company or attorney will compile a report that summarizes their findings.

What Should You Look for in a Preliminary Title Report?

When reviewing a preliminary title report, there are several things you should look for:

• Ownership: Make sure the report accurately reflects the current ownership of the property.
• Liens and encumbrances: Look for any liens, judgments, or other encumbrances on the property. These can include mortgages, tax liens, and easements.
• Legal description: Check to make sure the legal description of the property is correct.
• Exceptions to coverage: The title company may list exceptions to the coverage of the title insurance policy. Make sure you understand what these exceptions mean.

What Happens After You Receive a Preliminary Title Report?

If the preliminary title report reveals any issues with the title, you may need to work with the seller to resolve these issues before closing. This could involve paying off liens or obtaining releases from creditors.

Once any issues have been resolved, the title company will issue a final title report, and you can proceed with the closing. At closing, you will sign the necessary documents and pay any closing costs.

Conclusion

Obtaining a preliminary title report is an essential part of the home buying process. It can help you identify any issues with the title, ensure clear title, and obtain title insurance. When reviewing the report, make sure to look for any liens or encumbrances on the property, check the legal description, and understand any exceptions to coverage. If any issues are identified, work with the seller to resolve them before closing.