So you’re buying a home and you received a Preliminary Title Report from the escrow company. What is a Preliminary Title Report?
The Preliminary Title Report is provided by the title/ escrow company soon after escrow is opened. Escrow is opened after a buyer is in contract to purchase the home. That means that the preliminary title report (aka “prelim”) is given to all parties in the transaction such as buyers, sellers, Realtors and the buyers lender. Preliminary Title reports can also be given to a seller when an executed Listing Agreement is signed and your Realtor has opened escrow with a title/ escrow company. If that is the case, an updated “prelim” will be given once an executed contract is in place.
What’s in the Preliminary Title Report?
- Information on where escrow is opened (which company) and the contact information of the escrow officer
- The form of title insurance anticipated by the report
- Title – who the owners are (or trust, etc.)
- Legal description of the property (assessor’s parcel number, address from tax records etc.)
- Info on any and all liens recorded against the property (property taxes, supplemental taxes etc.)
- If there are any covenants, conditions and restrictions (CC&Rs- Home Owners Association)
- If there are any easements (usually there are at least public utility easements)
- Other liens, such as a deed of trust (sellers mortgage, contractor liens etc.)
- A plat map of the property
This information is very important for both the buyer and seller. The “prelim” states all the liens on the home. This is so important for thus reason; let’s say you are purchasing a home for $275,000 and the prelim states there is a $50,000 IRS lien and a mortgage of $255,000. The math doesn’t add up. Is the seller prepared to come to the closing table with cash to pay the difference? This information could make a deal fall apart so the sooner you receive and review the Preliminary Title Report, the better. Set time aside and read it. Ask questions. In Arizona, per the Arizona Department of Real Estate contract a buyer has 5 days to review the Preliminary Title Report. So if you as a buyer notice the math doesn’t add up or you didn’t realize the home is in a HOA community, you can cancel the contract and receive your earnest money back. Don’t over look this document. It is very important. Your escrow officer and Realtor can guide you through this document so you are fully aware of what it states.
For additional information regarding the Preliminary Title Report, click on the link below:
For more real estate information, please call/ text Realtor Laurel Jonas at 480-229-5861
Laurel Jonas 480-229-5861 RealtorLaurelJ@gmail.com