Identifying Red Flags on the Preliminary Report
Identifying Red Flags on a Preliminary Title Report Here are a few things to look for on a Preliminary Report that might cause problems prior to closing: INCOMPLETE OR INACCURATE LEGAL DESCRIPTION The legal description on the title commitment should always be compared to the legal description in the purchase and sale agreement. This ensures all property being conveyed has been included and thereby covered in the preliminary title commitment and forthcoming title policy. OUTSTANDING DEED(S) OF TRUST Deeds of Trust which were paid off, but not reconveyed, will require a reconveyance from the trustee or a court-ordered satisfaction to remove it from the record. In certain situations, with proof of payment and indemnity, the title company may insure around these encumbrances. TAXES AND ASSESSMENTS Look for an exemption or classifications designated that would change the tax amount as a result of the sale or loan, such as a Senior Exemption or Forest Land designation. The tax rate...
