A preliminary title report is a document that provides an initial assessment of the ownership of a piece of property. It includes information about the current owner, any outstanding liens or encumbrances, and any other potential claims or restrictions on the property.
The preliminary title report is an important tool for anyone considering purchasing a piece of property. It can help to identify any potential risks or problems that could arise during the transaction.
This report is prepared by a title company or an attorney after a title search has been conducted.
What is a Preliminary Title Report?
As stated earlier, a Preliminary Title Report is a report prepared by a licensed title company that shows the current owner of record of a property, all outstanding liens against the property, and any easements or other encumbrances on the property.
The Preliminary Title Report also includes a commitment by the title company to insure the buyer against any losses that might occur as a result of any matters revealed in the title search.
It is important to note that a Preliminary Title Report is only valid for a short period of time – typically 30-60 days – so it is important to order one as close to your anticipated purchase date as possible.
The Purpose of a Preliminary Title Report
A preliminary title report is a document prepared by a title company that outlines the current ownership status of a piece of property. The report includes a search of public records to determine whether there are any outstanding claims, liens, or other encumbrances against the property.
The preliminary title report is an important document for both buyers and sellers in a real estate transaction. For buyers, it provides peace of mind that they are buying a property with clean title. For sellers, it provides assurance they will be able to sell the property without any issues.
Preliminary title reports are typically prepared by title companies at the request of either the buyer or the seller in a real estate transaction. The reports are generally not required by law, but they are commonly used in transactions involving commercial properties or properties with complex ownership histories.
How is a Preliminary Title Report Used?
The report is used to help buyers and sellers determine whether or not to proceed with a real estate transaction.
Who Needs a Preliminary Title Report?
A Preliminary Title Report is usually prepared for the benefit of the prospective purchaser of real property. It expresses the condition of title as it appears in the public records and other sources searched by the title company, and should be read carefully before any purchase is made. The report will disclose matters which, if not corrected, might result in a loss of your interest in the property or an encumbrance on your use and enjoyment of it.
What Does a Preliminary Title Report Include?
A preliminary title report is a document prepared by a licensed title insurer or abstract company after a thorough review of the public records. It sets forth the current ownership status of a property, any outstanding encumbrances against it, and any easements or other rights of way affecting it. It also provides a history of the property’s title, going back at least 20 years. In some cases, the history may go back further.
The purpose of the preliminary title report is to give the prospective purchaser of a property an idea of what they are buying, and to alert them to any potential problems with the title. For example, if there are outstanding liens against the property, the buyer will be responsible for paying them off. If there are easements or rights of way affecting the property, the buyer may be restricted in how they can use it. The preliminary title report can also give the buyer an idea of how marketable the property is – if there are any encumbrances on it that would make it difficult to sell in the future.
The Cost of a Preliminary Title Report
A Preliminary Title Report is a document that gives the buyer(s) of a property an estimate of the fees and expenses they will need to pay to obtain title insurance. The report also provides information on any liens or encumbrances against the property that may need to be satisfied before title can be transferred. In some cases, a Preliminary Title Report may also be referred to as a “commitment.”
The Timeframe for a Preliminary Title Report
An important thing to know about a Preliminary Title Report is that it is only effective for a limited period of time. This is due to the fact that the Preliminary Title Report only contains public information available at the time the report was generated.
This means any changes that occur after the report was generated will not be reflected in the Preliminary Title Report. For this reason, it is important to make sure you are aware of the timeframe for a Preliminary Title Report before you rely on it for making any decisions about a property.
It is important to note that even though a Preliminary Title Report may no longer be effective after the timeframe has expired, this does not mean the title of the property has necessarily changed. The only way to know for sure if there have been any changes to the title of a property is to order an updated Preliminary Title Report or to order a full title search.
Advantages and Disadvantages of a Preliminary Title Report
As with any type of report, there are both advantages and disadvantages to using a Preliminary Title Report. Some of the key advantages include:
- Gives you a good overview of the property’s title history
- Helps you identify any potential risks or problems with the title
- Can be used to negotiate with the seller on price or terms
- Often required by lenders if you are obtaining financing for the purchase
Some of the key disadvantages of a Preliminary Title Report include:
- May be outdated by the time of closing (usually 60-90 days)
- Does not guarantee there will be no problems with the title at closing
- Seller may not be willing to negotiate on price or terms if they know you have obtained a Preliminary Title Report