One of the most important documents to review is the preliminary title report, yet many agents do not bother to go over it with their clients and sometimes they do not even bother to read it. This report will show vesting, ownership, encumbrances against property and any related matter that could affect the title. It is important to look at this report because it will state what title insurance will not protect and sometimes, those items are problematic or archaic and have no reason to exist anymore. You should carefully go over these with your attorney or realtor to confirm that the title is as clean as possible before closing a transaction. The report will contain the following items
1)Legal description: This portion shows where the property is located, address, as well as it’s boundaries.
2)Property taxes: This portion shows what taxes or owed or if the taxes are paid off. If it has not been paid off, it will usually be taken care of before the close of escrow
3)Mortgage Liens: This shows the lenders that have a lien on the property, the amounts owed to them as well as the order of seniority in which they must be paid off.
a.Easements: These give others access to property such as a utility company or maybe there is a property behind yours that requires an easement for them to access their property
b.CC&R: These apply to condos and stand for Conditions Covenants and Restrictions. These spell out the rules within the community that one must adhere to
c.Historic district requirements, planning, or other that the local planning department may have placed on the property
Below are some really useful Red Flags to look out for. These red flags were provided by USA National Title Company and I do not claim any ownership to them.