Admittedly, reading preliminary title reports can be a little... dry. However, there are some very important aspects to your transaction that can be revealed in this report.
Knowing and understanding the different components of a preliminary title report can help you scan through it quickly to look for any red flags. This will help you communicate with your clients, look like an expert, and keep a transaction progressing along smoothly.
Reviewing this report with your buyers and sellers is good practice to serve your client and also to protect yourself.
Have all the intended pieces of the property for sale been examined? Are there any surprise liens or encumbrances? Has the buyer reviewed the CC&R's and do they understand them? Are your sellers actually vested owners in the property? Is there a shared driveway or an easement that you need to discuss with your buyer?
Here is a brief explanation of a sample preliminary title report. You can find the sample preliminary title report that corresponds with this information by clicking on the image below. Enjoy and if you have questions ~ we're here for you. If you're in the Willamette Valley and would like to go over this information in person, let's meet up!
Explanation of a Sample Preliminary Title Report
(A) Contact information for person or company who originally placed the order.
(B) Date the report was typed. It is not the date to which the report is current. Also shows the
escrow number and your escrow contact person as well as your title number and your title
contact person. Refer to these numbers when contacting your local title or escrow
(C) Policy type(s), liability amounts and premiums, proposed insured buyer and any applicable
endorsements and/or government lien service fees.
(D) Legal description of the property on the report. Should be checked to ensure that the
information provided matches what is thought by principals involved.
(E) Date and time to which the report is current. The information reflected in the report only
represents what is ‘of record’ on or before this date and time. This will likely NOT be the
effective date of the policy. Our search will be updated to the date on which the prime
documents are recorded in county records and will then be the effective date of our policy.
(F) The party or parties who own the legal title (as opposed to contract purchasers). Information
reflects how the title is held, e.g. Fee Simple, As Tenants by the Entirety or As Tenants in
(G) Current tax information.
(H) Lien filed by the City for the proportionate share of the cost of building a sewer which
benefits the subject property. Lien showing illustrates a bonded City lien and shows the
original amount of the lien and the amount left unpaid at the time of the search.
(I) (CC&R’s) Indicates that the former or current owners of this property have imposed certain
restrictions and conditions upon ownership. The exact nature of these restrictions can only
be properly ascertained through a complete and thorough reading of the document. A copy
of this document will be provided by AmeriTitle to any of the principals in the transaction
(J) Shows there is a restriction on the location of improvements on subject property.
(K) Makes known a recorded easement that burdens the property.
(L) Exception indicates that either the present or former owners of the property have granted a
security interest in the property to secure payment of an obligation. The names of the
Trustor, Trustee and Beneficiary, the dates of execution and recording, and the reel and
page of the instrument, the original amount of the Trust Deed. Also indicates whether the
Trust Deed had been modified, assigned or is in default (if such was of record).
(M) Shows a periodic payment exception. Each payment, as it becomes due and remains unpaid
will add to the amount of the general lien on all of the debtor’s real property. In order to
issue a policy without this lien showing as an exception, AmeriTitle would require proof that
all payments are current up to the date of the policy, and that all costs and attorneys fees
have been paid.
(N) Unpaid State taxes, i.e. Income tax.
(O) Judgment that must be paid or released of record before it will be removed from the
(P) Exception may appear on a preliminary title report when the lender has requested extended
coverage since these policies insure against encroachments, easements and setbacks. This
exception may be removed by a foundation survey or by a physical inspection of the
(Q) Exception will appear on the preliminary title report when the lender has requested
extended coverage since these policies insure against adverse possession. This exception
may be removed with a signed ALTA affidavit.
(R) This exception will appear on the preliminary title report when the lender has requested
extended coverage since these policies insure against statutory liens for labor or materials.
These types of liens are generally associated with new construction. Exception may be
removed with a signed ALTA affidavit.
(S) Deed affecting the land that has been recorded in the past 24 months of the report date.
(T) This note is indicating the need for additional information to be supplied which will assist in
determining the effect of “similar-name” liens and judgments.
(U) Property taxes paid.
(V) Information regarding where to send documents for recording and recording charges.