A Basic Understanding of a Preliminary Title Report

Once escrow is opened, the Preliminary Title Report is typically prepared
and provided for review within the first week of the transaction. The timing can vary, but receiving this report early in escrow gives the parties an opportunity to review the title information and raise any questions with the title or
escrow company.

‍What is a Preliminary Title Report?

A Preliminary Title Report can look complicated when you first receive it, but its basic purpose is to provide information about the property’s title and identify recorded matters that may affect the property or the transfer of ownership.

The report is prepared by the title company and is commonly provided to the parties involved in a real estate transaction. It may contain information regarding the current ownership of the property, easements, liens, restrictions, recorded documents and other matters found in the public record.

For the buyer, the report provides an opportunity to review title information and recorded matters affecting the property before completing the purchase. For the seller, it may identify title-related items that need attention during the transaction. The report is also used by the title and escrow professionals as they work through the closing process.

It Is a Preliminary Report

One of the most important things to understand is that a Preliminary Title Report is exactly that—preliminary. It should not be viewed as a guarantee that the property’s title is clear or that there are no other matters affecting the property. It is part of the title company’s process leading toward the issuance of a title insurance policy, subject to the terms, conditions and exceptions of that policy.

Because title matters can be complex, buyers and sellers should carefully review the report but should not hesitate to ask questions about anything they do not understand.

Who Should Answer Questions About the Report?

The title and escrow companies are the professionals who specialize in these matters. Real estate agents can help make sure their clients receive the report and understand the importance of reviewing it, but agents should generally avoid interpreting the legal effect of specific easements, liens, restrictions, exceptions or other recorded documents.

If you have a question about an item appearing on a Preliminary Title Report, contact your title or escrow professional for additional information and guidance. When appropriate, they may also recommend that you consult an attorney or another qualified professional.

The goal is simple: make sure the appropriate information is available for review and that questions are directed to the professionals best qualified to answer them before the transaction moves forward.

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