After receiving a title order, one of the first steps we take as a title company is to order a title search from a licensed abstractor. Within a few days, that abstractor produces a title report (otherwise known as an abstract of title) for our review and determination as to the insurability of title. See Sample Title Report – here.
A title report contains, but is not limited to, the following determinations:
- Proper ownership by examining documents of conveyance in the chain of title
- Outstanding mortgage lienholder interests
- Outstanding judgment lienholder interests
- Outstanding governmental tax lien interests
- Pending court actions having the potential to impact property interests
- Easements, covenants, or restrictions which may impact property use and marketability
- Accurate legal description, including lot/block/square numbers and plat references
Some matters that are reported, such as unreleased mortgage liens (albeit having been paid in full), result in uninsurable title until the property owner can obtain a release from the mortgage lienholder. This can cause a delay in meeting the agreed upon date of closing. Similarly, other matters, such as unreleased judgments against prior owners, sometimes come as a surprise to the current owner and cause delays in closing.
Based on the local land records, a title report also accurately determines who (or what entity) is vested with title; which is oftentimes not accurately reported in the tax records. Unfortunately, it is the local property tax records (as opposed to the more accurate land records) that real estate agents rely upon for identifying the sellers within the contract.
By obtaining a title report in advance of closing or at the time of listing the property, a seller and his/her agent can mostly avoid closing delays by having the early opportunity to cure title if necessary.