Title Insurance & A Preliminary Title Report ~ What Are They?

In short terms I tell clients the title insurance makes it so 'Johnny Joe' can't claim he owns your property 3 years after escrow closes. That's the brief description.

But, it actually can be so much more than that. Read on the learn something today:

Whenever my seller(s) sign a listing agreement, one of the first things I do, is order a preliminary title report.

The prelim is an intense search on the property in question and the sellers of same property.

When it arrives I read it, yes, I truly read it. I'm looking for liens, weird judgements, odd 'exceptions' on the report.

Why you ask? Because nothing can hurt a sale more than finding something 'off' on the prelim that needs time to resolve.

Say you find a lien against the seller they thought was charged off back in the day? Well, we can't close escrow with a clear title unless that lien is paid. Because, if that lien isn't paid, buyers don't have a clear title. And, without a clear title, there is no title insurance without that lien still be attached to the property.

There is what is considered a 'cloud' on the title. 

And, trust me, you don't want that stuff raining on your parade!

What we frequently find are old CC & R's that run with the land. Mineral rights, stuff like that. Of course, we find the sellers mortgage.

I've got one now that has a couple issues that seller thought was cleared years & years ago! I've found old mortgages that are just errors. I found a child support judgement. An HOA lien against a seller years ago as well. Tax liens, mechanics liens. You think it, I've seen it.

And, to get clear title insurance & close escrow, we frequently need to clear exceptions noted on the prelim.

Curious about any old stuff you think just may be attached to your home? Just ask, I'll help you find out.