How to Read a Property Title Search
A property title search report can be confusing to an untrained eye. Real estate terminology, easements and exceptions that go on for pages can overwhelm and confuse many people. You can learn to read these reports done with a moderate amount of education and effort, and it can result in a better understanding of the condition of your property.
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Instructions
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Break the report down into the following categories: property title, property description, liens and mortgages, easements and notes. Looking at each category of items in turn is easier and much less overwhelming.
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Identify the property being searched. This is shown in a title report as a legal description. This description shows where a property appears according to the Public Land Survey System's grid system using identifying township, range and section numbers.
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Verify the ownership and title of a property. The report will list all owners of a property and their interests, such as "John Doe and Jane Doe, husband and wife, as joint tenants."
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Look for liens and mortgages recorded against a property. Statements will be listed stating if a Deed of Trust (legal recording of a mortgage), tax lien or judgment (such as a small claims settlement) have been filed against a property.
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Identify easements. Easements are rights to use a property. The most common easements are those giving rights to water, electrical or gas companies to service an area and rights of way giving people the right to use a road on a property.
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Look for notes such as exclusions. Exclusions are items that cannot be insured by title insurance, so it is important to recognize these exceptions and determine how they affect a property.
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Tips & Warnings
When you buy or sell a property and use an escrow company, your escrow officer will go through the title report and explain each item and its significance. The escrow officer can also explain which items will transfer to the new owner and which items will be removed as part of the transaction.
Notes on a title report regarding significant title changes, such as a series of quitclaim deeds or transfers, may indicate a problem with the legality of a title; proceed with caution.
