Straight Talk About Real Estate

What is a preliminary title report, or prelim?

As a buyer you will be given a copy of the prelim to approve. The report is from the title company that will be providing insurance on the title on the property. The prelim shows the rightful owner of the property and lists any claims against the property for unpaid debts, such as property taxes and mortgage liens. The title company will require all liens be paid off prior to closing. Problems arise when there are liens on the prelim that the seller was not aware of or not suppose to be there. It may take some time to have it cleared. There may also be a cloud on the title. An example of that is if title was transferred but was not done properly.

Problems with title could cause delays in the escrow. If the buyer chooses not to approve the prelim, that needs to be communicated before the contingency period is up, in order to cancel escrow without the buyer losing their deposit.