One of the steps involved in the home-buying process is one that requires obtaining a preliminary title report, and many people have no clue what this is or why it is needed. If your real estate agent or lender talks about this report, here are the details you should know about it, so you can understand what it is and why it is needed when buying a house.
It Proves Who the Owner of the House Is
First of all, you might wonder who prepares a preliminary title report, and the answer is a title company. You can choose the title company you hire to do this, or you can let your lender or real estate agent make this choice. The company hired will begin working on the report when they are hired for the job, and the main thing they will look for is information on the owner of the house. The owner of the house is the person who has rights to the house, and this person's name should be the name on the title.
Problems with title work often exist when there are situations where people inherit homes. For example, if someone's parent died and this person moved into the house afterward, this person would assume the house is his or hers. While the parent may have left it to this person, it would not legally be that person's house until the title work was changed into his or her name. If this person tried to sell the house, there could be problems because the title is in the parent's name.
It Contains Unique Details About the House
The second thing the title company looks for when preparing the report is the unique details of the house, including the address and property description. These types of details prove which house is being sold by ensuring that the house description and location match these features of the house a person is buying.
It Reveals Liens or Other Problems with the Home's Title
The other important part of the preliminary title report is researching problems with the title, such as liens. If a seller does not know about liens on the property, it could potentially cause problems in the closing of the house. Title work is done to avoid problems like this by revealing all liens and issues with the title of the home in question.
Understanding the steps of the home-buying process can help you stay more informed when you're looking at real estate for sale. If you have questions about this report or other steps, you can find answers by talking to your agent.