Everything You Need to Know About Property Title Reports

By: ROS Team

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When you enter the real estate world, be it for selling, purchasing, or renting property, you will come across many terms you might not have heard before. This may especially be the case if you’ve never lived on your own.

Most people get confused about whether or not there’s a difference between property titles and property deeds. They are two different concepts. A property title report is one of the most critical documents in the home buying and selling process. Here is everything you need to know about property title reports.

What is a Title Report?

The property’s title is the legal document that shows who legally owns the property. This document along with making up the property’s title report. Whoever holds the title has all legal rights to the property.

Note: A legal description is a unique identifier. It usually contains 2 or 3 short paragraphs which accurately pinpoint where a particular property is located. It also contains parameters such as lot features, lot number, total acreage, parallels, meridians, etc.

There are several ways a title report for property can be held:

  • Sole Ownership: In this type of title report, one individual has exclusive rights over the property That means they can sell, lease, rent, or occupy the property.
  • Tenancy in Common: When two or more people share the title, it is known as a tenancy in common. You often see this type of arrangement when multiple partners purchase an investment property together.
  • Joint Tenancy with Rights of Survivorship: This is similar to tenancy in common; the only difference is that, if a joint partner dies, the deceased person’s share of the property automatically transfers to the remaining partners.

Be Mindful of the Following Potential Issues in a Title Report Real Estate:

The Title Report real estate should not contain the following errors, as they may hinder the transfer of ownership when the property gets a new buyer.

The Most Common Issues in the Title Report Include:

  • Public Records Errors: Any mistake in a property’s official documents, such as typing errors or incorrect dates, can affect the validity of the title report.
  • Property Liens: When a bank or other lenders places a lien on the property for unsettled debts, the property could be used as collateral for the previous owner’s outstanding debts.
  • Illegal Deed: A deed can be deemed illegal if it is done by someone who is not entitled to transfer the property. A deed can also be considered illegal if it’s made out to a minor or to someone who is not of sound mind.
  • Family Members: When the rightful heir to a property is missing at the time of the owner’s death, other family members may claim to be the property’s rightful owner.
  • Encumbrances: This sometimes happens when a third party claims a portion of or the whole property.
  • Building Code Violations: Like if zoning laws only allow a residential unit and you are buying a commercial building there or if building codes ask for a fire emergency system in every unit and you are buying one without it.
  • Falsified Documentation: Believe it or not, people go to great lengths to forge documents, and it may make it tough to clear the title.

How to Prepare a Title Report

You may conduct a title search on your own if you want, but it’s usually not recommended. It’s worth the investment to have an experienced title officer or title company prepare the report on your behalf. They know what information to look for and from where they can find such information. Typically, sellers provide preliminary title reports, but buyers should complete the title report for a property as well.

prepare title report

 A significant source of title report real estate information is the public record. You should be able to locate basic information about the property, such as:

  • The number of home loans taken out on the property
  • Whether the property is included as an asset in a will
  • Whether the property is included in a divorce decree or settlement
  • County assessment records
  • Tax liens or other court records
  • Land surveys
  • Street and sewer assessments
  • Property deeds filed with the county
  • County land records
  • Bankruptcy court records

Most Frequently Asked Questions on a Property Title Report

FAQ

  • What Does a Title Search Show?

A title search identifies who the legal property owner is. It also provides information about whether there are any lingering financial liabilities tied to the property (i.e. unpaid contracts, liens, mortgages, or judgments) that need to be cleared before the property can transfer to a new owner.

  • How Much Does it Cost to Do a Title Search?

The fees to conduct a title search will vary depending on the property, but can generally cost between $100 and $200. Usually, the cost for a title search is included in the closing costs when a property is sold.

  • How Much Time Will it Take to Complete a Title Search?

The length of time can vary depending on the transaction type and property, but it usually takes approximately a week. Your title officer or real estate lawyer can provide you with updates as the closing process progresses.

  • How Do I Order a Title Report?

You’ll need to solicit the help of a title company to order a title report. Any title company should be able to retrieve the requested title. Search “property title report” or “title report real estate” using your favorite search engine or look under “title search” in the Yellow Pages.

If you prefer to pull the title on your own, you should start your search at the local courthouse or County Assessor’s office where the property is located. Public records are maintained at these places, so you may find a great deal of information on the property. However, keep in mind that the courthouse may not have all the documents you need for the complete title report.

  • Is the Title to a House the Same as a deed?

Many people use “title” and “deed” interchangeably, but they are two different concepts. A deed is a legal document used to transfer property ownership from one person to another. In contrast, a title clarifies the ownership of a property and can be used to transfer this ownership to someone else.

  • How Do I Conduct a Title Search?

Before I move on to answer the question, it is worth reiterating that the safest and easiest way to conduct a title search is to hire a title company’s services. A title company will assign a title officer to your request, and that person will complete all the research related to the property on your behalf. You’ll also have the added advantage of getting title insurance if you work with a title officer.

However, if you are determined to conduct your own title search, the first thing you need to do is to visit the nearest courthouse. Ask the clerk for assistance with locating and researching the property records on file. It is often hard to navigate the sea of documents, and it can be time-consuming for someone unfamiliar with the filing system.

Once you find the relevant documents, review everything in the documents regarding prior ownership. Pay special attention to notes about past transfers of the title. Be conscious of anything that may look suspicious or that doesn’t make sense. You may have to make an additional trip to the County Clerk or the County Assessor’s office to look for the deed information. It may be time-consuming, but running a tile report on your own is completely free.

  • What Is A Preliminary Title Report?

A preliminary title report is a document that documents the property owner(s). It also contains information such as property liens or tax debts on the property, a detailed description of the property, and if you can use it only for residential purposes or for commercial purposes as well.

Preliminary Title Report

In addition, it allows buyers to remove any items in the report that the buyer finds unacceptable before actually purchasing the property.

  • Who is Responsible for Providing the Preliminary Title Report?

Typically, the listing agent is the one who is responsible for providing the preliminary report. What happens is that the title company or an attorney reviews the property’s title to identify any problems that could prompt someone to dispute ownership or that could make it an illegal sale. Their conclusion is added in the preliminary report, which then goes to the buyer.

  • What are the Essential Parts of a Title Report?

A title report must contain mortgage liens which are shown in descending order. The largest value is shown at the top.  Another field of information is property tax information. This will let you know whether or not there are any taxes owed on the house. Before you buy a property, make sure that the taxes are paid.

There will be additional information in the title report, but pay special attention to these three parts of the title report.

What is Title Insurance?

Title insurance gives the owner protection against any issue that may arise related to the property’s legal ownership.

There are Two Different Types of Title Insurance:

  • Lender’s Insurance
  • Owner’s Insurance

Lender’s insurance protects the lender that finances the property purchase. Similarly, owner’s insurance protects the buyer from any ownership disputes. For example, if you buy a property and someone else claims ownership of the property later and can prove it, you will receive money totaling the home’s value.

It is always a good idea to protect yourself even if you don’t foresee there being ownership issues with your property.  If you are already working with a title company or title officer, title insurance will be offered to you when you receive a copy of the preliminary title report. When you buy a property, it’s a lifetime investment, so it is important to protect yourself against any potential issues.

How to Select A Title Company

The best solution is to ask your network — family members, friends, or colleagues — for referrals. You’ll be able to get their feedback about the company’s professionalism, prices, and turnaround time for getting your report. You can also explore some of the title companies that come up during your online search. Read the customer reviews about the company and use them as a basis for selecting a title company.

A title report is an important document in selling a property, so don’t compromise on getting it handled by a professional who will get the job done right. You might be tempted to work with the first company you see or the one which costs you less; just do your due diligence in researching companies and review all your options. Feel free to ask as many questions as needed before you begin working with them on your title search.

Final Takeaways

Whether you are a seasoned investor or a first-time homebuyer. You should investigate what you are getting into when purchasing a property. This is the very reason why the title report is so important. It tells you virtually everything about the property you intend to buy. Consider the above questions thoroughly as you embark on your quest for your next property title report.

Read Also:

What is a Property Title Search and How to Do It
What Does Title Mean in Real Estate?