The Essential Sections of a Preliminary Title Report

colony title preliminary title report

The information on the preliminary title report must be thoroughly examined before closing your home sale.

Out of the many records that serve to inform a new homebuyer about their property, the title report may be the most important. This report documents property ownership, vesting, and details regarding anything recorded against the home. The title company will compile this report from searching county records and preparing title insurance. Three pieces of your title report should be reviewed carefully; below, we explain those three crucial sections and why they matter. 

The Legal Description

The legal description of a preliminary title report will show you everything you won’t see in any marketing or advertising put forward by the real estate agent. This description details the property’s location, boundaries, and location concerning nearby streets and intersections. This section may be challenging to read due to its legalese, but this description is necessary and always precise. 

Taxes

Property taxes will show up as the primary lien on a preliminary title report. A property cannot be transferred to a new homeowner while owing outstanding property taxes. As the top lien, the preliminary title report will indicate whether the taxes are due or paid in full. 

Mortgage Liens

Mortgage liens will typically be listed below property taxes and will be ordered first, second, and third. The largest lien holder will be listed first. When a property sale closes, the liens must be paid in the order that they appear on the report. If there is a “short sale,” this means there are not enough proceeds from the sale to pay off the property taxes and the lien holders. For the sale to close, the lender then must agree to the short payoff. 

Other Information That May Appear on the Title Report

There are several other items that could appear on a title report besides taxes and loans. These include: 

  • Easements: if another owner has access to the property via an easement, it will be recorded on the preliminary title report. 
  • Restrictions, Oversights, Planning Requirements: occasionally, there will be items on the preliminary title report that are not common. For instance, if a home is located in a historic district, it is subject to specific community regulations. These regulations often involve the home’s appearance, so a potential buyer should be informed of any limitations. 

As a potential buyer, you and your real estate agent or attorney should scrutinize the preliminary title report so it can be delivered as clean as possible. If there are any specific requirements or property issues, you should understand them thoroughly before you close. 

A Title Company You Can Trust: Colony Title

At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, and LinkedIn.

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