Are you buying a home? Wondering how to read a preliminary title report!
Are you in the process of buying a property and feeling overwhelmed by all the paperwork? Don't fret because understanding preliminary title reports doesn't have to be a mystery. In this step-by-step guide, we will unravel the secrets behind preliminary title reports, helping you navigate the intricate world of real estate transactions with confidence.
A preliminary title report is a crucial document that provides valuable information about the property's ownership history, potential liens, and easements. By examining this report, you can ensure a smooth and secure property purchase. But decoding the language and terms used in these reports can be intimidating. That's where our guide comes in.
We will break down each important section of the preliminary title report, explaining what it means and how it impacts the buying process. From understanding property descriptions and legal descriptions to identifying exceptions and requirements, this guide will equip you with the knowledge to make informed decisions.
Let us demystify preliminary title reports and give you the tools you need to navigate the real estate world like a pro. Get ready to unlock the secrets and take control of your property purchase journey.
1. Owner’s Name
2. Type of Estate or Interest
3. Exceptions
4. Notes
This is where you can begin to understand if there are any easements either to the benefit or against the subject property. For instance, the subject property may have a driveway that crosses over a piece of the neighbor's property , allowing access to the street. Then again, the neighbor might have an easement to walk along the side of the subject property to get to his/her backyard. The point is there are many types of easements, and this is where you can find them. If there is even a wisp of a question, it is important to ask the title officer to know what you are buying!
5. Plat Map
6. Legal Description
Tips on how to read a Preliminary Title Report
- Banks review the 24-month chain of title.
- Property that is resold in 90 days or less by the seller from the time of their acquisition is not eligible for FHA financing. Conventional loans are generally OK but will be subject to scrutiny when the appraisal is reviewed.
- Properties resold between 91-180 days are eligible for FHA but will require a 2nd appraisal if the price is above 100% of the price paid by the seller. Invoices may also be required to justify the increase in value.
- Abatements should be reviewed cautiously as some may take time to clear. More often than not, it will take much longer than a 30-day escrow would allow.
- Multiple sellers may hold up closing as some are not readily available; make sure escrow has all contact information for setting up signing appointments.
- If the seller is a corporation, partnership, or LLC, then the authorized signers of these entities must be verified.
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Get in touch!
Oliver Burgelman
415.244.5846 | [email protected]