Part of the real estate transaction once the offer to purchase has been accepted is to receive the preliminary Title report. Escrow and Title firms will send a preliminary title report to the buyers usually with one to seven days. Then usually 24 hours before the actual close of escrow date another title report is sent to ensure no last minute liens have been placed or further research has been conducted showing a questionable chain of title, etc.
The buyer has due diligence to read the Preliminary Title report. However, I too must undertake due diligence in reading this document respective to confirm the accuracy of the following:
- Assessor’s parcel number or numbers
- Address if available
- Names of the seller(s) and buyer(s)
- Time lines
- Purchase price
Further reading goes to the Exceptions on the Title such as property taxes paid or not paid, any loan balance, property easements, etc. Additionally, the Preliminary Title Report I receive has active links to various documents such as the original deed, plat maps, receipt of property tax bills, etc. Those links are actual PDFs which I download and save.
After reading the Preliminary Title Report, I then email that report along with all documents that I have downloaded to the buyer. Yes, Escrow and Title also mails the report. However, my understanding as part of my due diligence is many buyers don’t understand the report and far fewer actually read the entire document. Also, sometimes buyer’s don’t read and just sign the email showing receipt.
I then call the buyer(s) and inform them of the email. Also, I encourage my clients, the buyers, to read the entire document.
Again, my acronym for DUE is applied in this specific situation:
D=Deliberate. I must be deliberate in my actions. This means taking action as quickly as possible. I read the Preliminary Title Report usually within 1 to 3 days.
U=Understanding. I recognize the understanding of my buyers may not be at my level of competence, knowledge and experience. Also my understanding extends to recognizing my potential clients to clients may not read what is forward to them. If I read any issue that may cause concern, I call that issue to the attention of the buyers.
E=Efficient and Effective. For me, efficient means doing things right and effective means doing the right thing. With time is of the essence, this directly correlates to being efficient. Living by my own moral code along with the Code of Ethics, effective is doing what is right.
Part Three of this Series will look at the Due Diligence respective to the Flood Plain Report.
If you missed Part One, the DUE diligence looks to Permits.
Feature Photo Courtesy of Pixabay.com
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