Preliminary Title Report

A preliminary title report is a crucial document in the real estate transaction process, providing information about the property’s title history. Here’s how to review a preliminary title report and identify important items:

1. Obtain the Preliminary Title Report:
– The preliminary title report is typically provided by a title company. It is usually ordered by the seller’s real estate agent or the escrow officer. Request a copy of the report for your review.

2. Review Property Information:
– Confirm that the property information, including the legal description, address, and parcel number, matches the details of the property you are interested in purchasing.

3. Check Ownership Information:
– Verify the current owner of the property and ensure that it matches the seller’s information. Look for any discrepancies or issues related to ownership.

4. Outstanding Liens and Encumbrances:
– Pay attention to any existing liens or encumbrances on the property. These may include mortgages, tax liens, or judgments against the current or previous owners. These items can affect the title’s clear ownership.

5. Easements and Restrictions:
– Review any easements or restrictions mentioned in the report. Easements grant specific rights to others (such as utility companies), and restrictions may limit how the property can be used.

6. Legal Description Accuracy:
– Ensure that the legal description of the property is accurate and matches the details in the preliminary title report.

7. Title Exceptions:
– Look for any exceptions listed in the report. These are items that may not be covered by the title insurance policy, such as specific easements or rights that survive the property’s transfer.

8. Mechanic’s Liens:
– Check for any mechanic’s liens or other claims related to construction work on the property. Unpaid contractors may place liens on a property, which could affect the sale.

9. Covenants, Conditions, and Restrictions (CC&Rs):
– If the property is part of a homeowners association (HOA) or a planned development, review any CC&Rs that may apply. These can include rules and restrictions governing property use.

10. Title Insurance Commitment:
– Pay attention to the title insurance commitment, which outlines the conditions under which the title company will issue a title insurance policy. It will specify any requirements that need to be satisfied before closing.

11. Survey Issues:
– If there are survey-related matters in the report, review them carefully. These may include discrepancies between the legal description and the actual property boundaries.

12. Unrecorded Issues:
– Be aware of any unrecorded issues that might affect the property title. These could include verbal agreements, disputes, or other matters not officially recorded but still relevant.

If you have any concerns or questions about the preliminary title report, it’s advisable to consult with your real estate agent or a title professional. The escrow officers are always ready to clarify items in the prelim and investigate further if needed. They can help you understand the implications of the information provided and ensure that you have a clear understanding of the property’s title history before proceeding with the purchase.