A preliminary report is an important document that a buyer and their lender (if applicable) will receive. Therefore, knowing how to read a preliminary report is an important document that contains information specific to your transaction. Moreover, we understand that keeping you informed is an essential part of the closing process. Additionally to help you gain a better understanding of it’s importance, below is an overview of the basic sections commonly found in a preliminary report. Likewise a Preliminary report is often referred to as a prelim title report.
How to Read a Preliminary Report
1. Schedule A
First is schedule A, the section containing the “Who, What, and Where” information about the property. Schedule A states who the current property owner is. In addition, schedule A of the preliminary report meticulously details the property boundaries (legal description) of the property. Moreover schedule A will clarify what type of property you are buying such as a single family home, condo, or town-home. Most importantly you may find that there is an owner on the title who may need to sign the residential purchase contract. While this is a rare occurrence, it is an example of why schedule A of the preliminary report is very important.
2. Schedule B-1
Schedule B-1 of the preliminary report is a list of exceptions to cover. Additionally in order to issue a policy to a new owner or lender, the preliminary report requires specific items to be cleared-up and satisfied. For example a preliminary report may require approval of a bankruptcy trustee, requiring other persons such as an heir or former spouse. Additionally schedule B-1 may ask to execute closing documents or requiring the release of various types of liens.
3. Schedule B-2
Furthermore items listed in schedule B-2 of the preliminary report may not be covered on the title policy. Exceptions from coverage may include restrictive covenants, mineral or water rights. These are often in place to preserve adjoining land. Restrictive covenants may hinder a homeowner to build a guest house or tennis court. Likewise water rights may include a pump house for a water well on the property and used by other homeowners nearby. Therefore schedule B-2 defines limitations to making modifications to the land. Additionally schedule B-2 will clarify whether utility easements are covered.
About the author:
The above real estate information regarding How to Read a Preliminary Report – Title Prelim Information was provided to James Jam, the #1 Individual Berkshire Hathaway HomeServices Real Estate Agent in San Diego County. Contact James Jam via email at email@example.com or by phone at 858-210-0509. The original content was provided by California Title Company.
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The information contained herein is deemed to be reliable, but it is not guaranteed. California Title Company assumes no responsibility for errors or omissions. An independent policy-issuing agent of First American Title Insurance Company. ©2016 California Title Company.