What to Look for in a Preliminary Title Report (Even If You’re Not a Title Expert)
Whether you're buying or selling a home, one of the most important (yet often overlooked) documents in a real estate transaction is the Preliminary Title Report — often called a "Prelim."
As a real estate broker, I always encourage my clients to understand what’s in this report, because it can reveal issues that could delay — or even derail — your closing.
So what exactly is a Preliminary Title Report, and what should you be looking for?
Let’s break it down in simple terms.
What Is a Preliminary Title Report?
A Preliminary Title Report is a document prepared by the title company during escrow. It outlines the current legal status of the property, including:
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Who owns it
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What debts or liens are attached to it
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Any legal restrictions or easements
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What the title company won’t insure (aka "exceptions")
It’s not just for title officers or attorneys — it’s a critical roadmap for a smooth closing.
Key Things to Look For in a Prelim
1. Confirm the Property Details
Start simple. Make sure the basics are correct:
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Owner(s) of Record: Does this match the seller?
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Property Address & Legal Description: Double-check for accuracy.
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Parcel Number (APN): This should match the property’s tax records.
If anything looks off, bring it up early — even small discrepancies can cause delays.
2. Who Holds Title? (Title Vesting)
The Prelim shows how the current owners hold title. Watch for:
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Trusts, LLCs, or Corporations: Does the person selling have legal authority?
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Deceased Owners or Probate: If someone listed on title is deceased, you may be looking at probate — a longer legal process.
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Divorce or Partnership Disputes: Check for court filings that could impact ownership.
3. Liens, Mortgages & Debts
This is where surprises often show up.
Look out for:
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Mortgages or Deeds of Trust: These must be paid off at closing.
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Mechanic’s Liens: These are filed by contractors for unpaid work — and can block a sale.
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IRS or Tax Liens: Any outstanding taxes owed can be a red flag.
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HOA Liens: These can sneak up if dues weren’t paid.
Why it matters: Liens need to be resolved or paid off before the property can transfer with clear title.
4. Easements and Restrictions
An easement allows others to use part of the property — common for utilities, driveways, or shared access.
Also, check for:
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CC&Rs (Covenants, Conditions & Restrictions): These are rules for the property or neighborhood — especially relevant in HOAs.
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Legal Access: In rural or unusual properties, make sure there’s a legal right to access the property.
5. Pending Lawsuits or Legal Notices
The Prelim might reveal:
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Lis Pendens (Notice of Pending Lawsuit): Could mean a legal dispute over the property.
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Foreclosure or Notice of Default: Indicates the property is in financial trouble.
These don’t necessarily kill a deal — but they do require expert handling and can delay things.
6. Title Exceptions: What’s Not Covered
Every Prelim lists "exceptions" — things the title company won’t insure against.
This is a crucial section, even though it’s filled with legal language. Look for:
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Unresolved easements
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Unrecorded claims
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Boundary disputes
Tip: Ask your escrow or title officer to explain anything that doesn’t make sense. That’s their job — and they’re usually happy to help.
Final Thoughts: Don’t Go It Alone
You don’t need to be a title expert — that’s what your escrow and title teams are for. But knowing how to spot potential red flags in a Preliminary Title Report can save time, stress, and money.
If you're buying or selling a home and want help reviewing your title report, I’m here to help guide you through it — clearly and confidently.
