Preliminary Title Report: Lecture 14

Preliminary Title Report

The Preliminary Title Report, also known as the “Prelim”, shows the legal chain of title. In other words, property ownership and any breaks or “clouds” in the title.

The purpose of the prelim is to ensure that the seller is giving clear title to the buyer. The title insurance company thoroughly investigates the property ownership and examines the report for liens and potential claims against the house.

Items that appear on a prelim include:

● Mortgage loans and lines of credit

● Unpaid property taxes

● Easements, for example from utility companies

● Foreclosure filings

● Mechanic’s lien

Items that are not liens against the property will not appear on a prelim. That’s why the title insurance company investigates each buyer and seller personally with the Statement of Information form. Here are a few items that may not appear on a prelim, but will affect the escrow closing:

● HOA liens

● Court judgments

● Child support cases

● IRS liens 

You will want to read the prelim report and understand it. If you have questions, ask your broker to help you study it. You need to understand it because you will review this form with your sellers.

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