How to Interpret a Title Report: A Guide for Property Buyers and Investors

Apr 20, 2023 | Real Estate Title

A title search is an essential part of any real estate transaction. The purpose is to ensure the title is clear and that no issues could impact property rights. A title report includes all the information from the title search. However, most people need to learn how to interpret a title report.

The information in a title search can be vital for closing on a property. Most lenders will only approve the closing with a title report. It is also a significant component of getting title insurance. But what kind of information is in a title report? This post will cover some things buyers and investors need to know about title reports.

How to Interpret a Title Report

Ownership Details

A title search will verify the owner of record for the property. Everything should be the seller’s name if it is legitimate. It may also have information about the chain of title. Beyond the owner’s name, the title report should also indicate the type of ownership interest. For example, they could be a sole owner. The owner might also be a joint owner with their spouse.

If there are problems with ownership, the report will contain notes that outline the issues. For example, it might note a break in the chain of title. It could also include findings that indicate a person or entity with a competing claim on the property.

Legal Description

The legal description is another critical point in a title report. This section covers a legal description of the property in question. It will have information like city, county, and state. The report may also include the street address and lot number. It may also cover descriptions of the metes and bounds of the property.

Beyond a locational and physical description of the property, the title report might also describe various property rights. The description section might outline any encumbrances or encroachments. It could also convey various limitations to rights. For example, if there are restrictions on water rights, it would be in the description. It will also have sections about the property’s tax history and liens.

Title Insurance Information

Finally, there will be a section for the title insurance policy and what is and is not covered. Generally, you have standard exceptions that apply to all properties. However, there may also be various exclusions and exceptions unique to the property.

Title reports are complicated documents. They have many pages, and they are often full of legal jargon. The interpretation of a single word can have an impact. You might be able to understand the broad strokes of a report, but it’s easy to miss the finer points. We recommend getting the advice of an attorney or real estate expert.

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