What is a title?
A title is an important document that establishes the legal ownership of a property. It is a record of the right to possess, use, and transfer property. In addition, the title includes information about the current owner, any liens or encumbrances on the property, and any restrictions or covenants associated with it. A title also serves as proof of ownership in case of dispute or litigation.What is title insurance?
Title insurance offers protection from potential legal issues by ensuring that property owners are not liable for any losses or damages as a result of title defects found in public records. It offers an assurance of exclusive ownership and peace of mind that no one else can claim property rights.
What is a preliminary title report?
A preliminary title report is an essential document for any property buyer. It provides crucial information about the legal ownership of the property and should be carefully reviewed before making a purchase.What does a preliminary report show?
The report includes details such as the current owner, any liens or encumbrances on the property, and any easements that may affect its use. It also outlines any restrictions or zoning regulations that could impact future development plans. A preliminary report also includes the following:- A detailed legal description of the property, including property boundaries, lot size, and any established easements or encroachments
- Any liens or outstanding debts against the property (including unpaid property taxes or even unpaid invoices to contractors who've completed work on the property)
- Any restrictions regarding the use of the property (which sometimes includes CC&Rs for condos)
Why are preliminary reports important?
Preliminary reports are an important part of the home-buying process. They provide information about the property that can help buyers make informed decisions. Preliminary reports may include restrictions set by homeowner associations, such as regulations on additions, exterior paint colors, and maximum heights for hedges. This information is essential to know before committing to a purchase, as it could affect plans for the property. In addition to providing important information about the property itself, preliminary reports are also necessary for obtaining title insurance. Title companies will investigate county records to verify that the title is clear and that the seller has the right to sell the property. Without a preliminary report, title insurance may not be issued, and buyers may be left unprotected in case of any defects or judgments against the property. Therefore, buyers must review their preliminary reports carefully before making any commitments.How much does title insurance cost?
Title insurance is an important part of the home buying process, as it protects both the buyer and lender from any potential title defects that may arise. The cost of a title insurance policy varies from state to state. It is based on factors such as the lender, purchase price of the home, and down payment amount. For example, if a policyholder in Dallas, TX, were to purchase a $300,000 home with a $50,000 down payment through First American Title Insurance Company, their title insurance policy could cost anywhere from $1,500 to $2,500, depending on local regulations. The cost of title insurance can also be affected by additional services such as document preparation or escrow fees. Therefore, buyers must understand all costs associated with their title insurance policy before signing any documents. Additionally, buyers should always compare quotes from multiple providers to ensure they get the best deal possible. By doing so, they can save money while still protecting themselves and their investment in their new home.Details to look for in a preliminary title report:
- Confirmation of the real owner's identity
- Adequate rights the owner has over the property and how that could affect future homeownership
- Right of the owner to complete right to sell the property.
- All current and future owners must comply with certain requirements set by a previous owner.
- Liens resulting from owed mortgage amounts, property taxes, or construction/repair payments.
- Bordering lots may have physical items, such as fences, extending into one another's territory. These are encroachments.
FAQ
Who is responsible for requesting the preliminary title report? In a typical real estate transaction, the seller is responsible for requesting the preliminary title report from a title company. What issues should I look for on my title report? Leins, easements, and encroachments are detailed in a preliminary title report. Each may raise issues for the home purchase. What if I decide I want to back out of the deal?If the problems on the title report are severe enough to make you not want to proceed with the sale, let your agent and/or lawyer know immediately to take advantage of the title contingency.
