Reading A Title Insurance Report

By this point in your home buying journey, you are probably familiar with title insurance and what it does to protect you from any trouble that may arise regarding the ownership and title to your property. Today we are going to dig a little deeper into the world of title insurance and explain the title insurance report to you. The title insurance report is a preliminary report that the title insurance company will issue to you after they perform their research on your property. The Title Insurance Report will explain to you any issues that might effect the insurance policy, such as any disputes, etc. which need to be cleared up before the policy can be issued.

The most important part of the report is the "exceptions". This is a list of the items that have to be cleared up before the title insurance company can cover you. Some of the things that may be on the list are listed below.

Taxes/Assessments

The Title Insurance report will show you the amount of taxes regularly assessed to the property, and whether or not they are paid or delinquent. Don't be alarmed if back taxes are owed on the property, since this will be taken care of by escrow during the closing. Something to pay attention to is if the property taxes are unusually high or unusually low. Your agent can help you to pinpoint the reason for this and decide what to do about it.

Vesting

This will tell you exactly who owns the property. Check to see that the seller's names are listed on the title report as the vested owners. The report will tell you the degree, quantity, nature and extent of the owner's interest in the property. This is a very important section to check out carefully, since if someone is not the legal owner of the home, they can not sell it to you.

Matters of Identity/Pending Actions

Sometimes there will be judgements or liens against the seller of the property. If this is the case in your situation, these things will have to be released and recorded prior to the sale of the property. The same goes for civil legal actions that are pending against a property. They will have to be taken care of prior to sale. You might ecounter this if the seller is currently going through divorce proceedings that might involve the house. The other most common type of pending action against a property will be when the property is still in probate after the owner's death. These are special circumstances where you might have to do something differently or wait until the property is released before closing.

Deeds Of Trust

If the seller has mortgage obligations that must be met before sale, these will also be listed. Do not panic if these are listed on your Title Insurance Report. Funds in escrow from the seller's proceeds of the sale will go to pay these fees prior to closing.

Joint Use

This is a very common listing on a title insurance report. If the property you are buying includes common areas that are to be used by other neighbors, such as driveways, shared walls, or easements, these will be included in the report also. This is so that each party will know exactly what the boundaries of the shared property is, and if there are special maintenance agreements,etc for shared property. These third party use issues are very common so do not be surprised if they show up on your title insurance report.

Legal Description of Property

The title insurance report will also list the legal description of the property. This is not be confused with the street address. The legal description of the property is usually nothing more than a long, confusing, description of the exact parcel of land that you are purchasing.Your real estate agent can help you determine that the legal description is in fact the exact same piece of property listed on your purchase agreement.

The main purpose of the title insurance agreement is to make sure that all issues that could be keeping a property from being insured are listed and addressed prior to the sale. Take the time to carefully examine your title insurance report to make sure that you have all your bases covered before proceeding. Some of the items listed may be confusing or hard to understand. Make sure that you have a trusted real estate agent like Hamid Ali help you through the process.