When it comes to purchasing a home, a step many buyers overlook is obtaining a preliminary title report. This report is a document that a title company or escrow agent prepares during the early stages of a real estate transaction that contains information about the property in question.
While Florida law does not require preliminary title reports, the information they contain can prevent unexpected financial burdens and legal complications down the road.
Learn the history of the property’s ownership
Knowing the current and previous owners of your new home can reveal potential issues related to its chain of possession that might affect your rights as the new owner. This knowledge is particularly important in Florida, where people bought and sold 287,352 single-family homes in 2022.
Identify liens and encumbrances
A preliminary title report will disclose any of the following issues:
- Unpaid child support
- Back taxes
- Mortgages
- Easements
These restrictions on a piece of real estate can impact your ability to use the property as you intend, so it is best to know about them beforehand.
Uncover potential deal breakers
The report can reveal deal breakers that might lead you to reconsider the property purchase. For instance, if an unresolved legal dispute over the property exists, it could hinder your ability to obtain title insurance or even acquire the property altogether. Discovering such issues early can save you time, money and potential legal headaches.
Once you have a complete picture of the history and current status of the property you are considering for purchase, you can make an informed decision about whether to move forward with the deal and whether to invest in title insurance to protect your investment.
