As much as a buyer wants to believe that the home they found is perfect, a clear title report ensures there are no liens placed against the prior owners or any documents that will restrict the new owner's use of the property.
A preliminary title report provides buyers an opportunity to review matters affecting the property which will not be covered by their title insurance policy unless they are removed before the purchase is final
When reading a preliminary report, a buyer's priority is checking the extent of their ownership rights. The report will note in a statement of vesting the degree, quantity, nature and extent of the owner's interest in the real property. The association states the most common form of interest is fee simple or fee, which is the highest type of interest an owner can have in land.
Liens, restrictions and interests of others that are being excluded from coverage will be listed numerically as exceptions in the report.
Interests of third parties, such as easements granted by prior owners that limit use Of the property, need to be considered Some buyers attempt to clear these unwanted items prior to purchase.
In addition, a list of standard exceptions and exclusions not covered by the title insurance policy may be attached This section includes items the buyer may want to investigate further, such as any laws governing building and zoning.
