Wondering What Is A Preliminary Title Report? Let’s Find Out!

Wondering What Is A Preliminary Title Report? Let’s Find Out!

A preliminary title report ensures a smooth and secure property purchase. Getting a preliminary title is an early step in the due diligence process and provides vital information about a property's title history. Let’s dive into preliminary reports – what they are, why they matter, and how they affect you if you’re looking to buy or sell property.

Let’s begin with what a preliminary title report is.

Understanding The Preliminary Title Report

Wondering about the preliminary report meaning?

A preliminary report and title documentation in real estate commitment or lien purchase provides comprehensive insights into the property's title. It reveals crucial information to buyers for a secure and smooth transaction.

So, what does preliminary mean for housing? The preliminary report offers protection against potential title issues. It contains information about the property's ownership history and also highlights any liens, encumbrances, or restrictions.

The preliminary real estate title report also verifies that the property or house legally belongs to the seller and also highlights any potential conflicts related to property ownership. Thus, you can use it to avoid complications after the purchase.

Key Components Of A Preliminary Title Report

You now know the answer to what a preliminary title commitment is.

Moving forward, let’s explore various sections within a preliminary title commitment:

  • The report establishes the current property owner's identity.
  • It also ensures their legal right to sell the property.
  • It also outlines the property's title history, including past owners and transfers.
  • The preliminary title lists any outstanding debts or encumbrances associated with the property.
  • You’ll find info about any outstanding mortgages, unpaid taxes, or mechanic's liens.
  • It also reveals if any third party holds legal rights to access or use the property.
  • The report also highlights any limitations on the property's use.
  • It also lists any zoning restrictions, HOA rules, and environmental regulations.
  • The commitment report shows that the title company will issue a title insurance policy upon closing.

Ordering A Preliminary Title Report

It is usually the seller’s responsibility to order the PTR report in a real estate transaction, but it is the buyer who must bear the cost of the preliminary title report.

The seller collaborates with the chosen title company to gather the necessary documents. The title company then conducts a thorough investigation to reveal any potential issues or encumbrances. They then issue a preliminary title report, which is a critical part of the seller's disclosure packet.

This packet includes essential documents for both the buyer and the lender during a real estate transaction. Throughout this process, the seller, buyer, real estate agents, and the title company must ensure effective communication. This way, all parties remain well-informed about the property's title status.

If you are still wondering who is responsible for ordering the preliminary title report, in short, it’s the seller.

Issuance And Cost Of Preliminary Title Report

Now, let’s answer when a preliminary title report is issued. The report is issued in the early stages of a real estate transaction. The seller must initiate the process of acquiring one, but it is the buyer who bears the cost of the preliminary title report.

The preliminary title report cost varies depending on the location and intricacies of the property. Properties with numerous outstanding encumbrances, for instance, may require more extensive research on the part of the title company, which can increase the cost of the report.

Importance Of Preliminary Title Reports In Real Estate

A preliminary real estate title report plays a pivotal role in assessing and mitigating risks. Prelim reports provide a comprehensive view of the property's title and background. Also, by confirming the legal ownership of the property, PTRs help prevent later disputes, thus making the preliminary title report cost worth it.

A preliminary title commitment also discloses any encumbrances or liens on the property, such as unpaid property taxes or outstanding mortgages. It also uncovers title defects, such as errors in public records or issues with previous transfers – this can save both buyers and sellers from potential legal battles and financial losses down the road.

Buyers can use prelim title commitments to make informed decisions and negotiate with sellers to resolve any identified issues or decide whether or not to proceed with the purchase. A sum spent on the preliminary title report cost today can prevent future legal complications and disputes.

Comparing Preliminary Title Reports And Title Reports

Now, let’s compare preliminary title report vs. title report – the two are often confused with one another but are two different types of documentation.

You probably know by now what preliminary means for housing; these reports provide an initial overview of a property's title. As we discussed earlier, they include details about the property's legal owner, any outstanding encumbrances, liens, restrictions, and so on.

Full Title Reports, in contrast to preliminary title commitments, offer a comprehensive examination of a property's title history. They provide a much more detailed account of its ownership, any past transfers, and a thorough search of public records. These reports go beyond the scope of PTRs. They identify additional title defects, legal claims, or encumbrances and also include information on the property's legal description, zoning regulations, and any outstanding debts or judgments against the property.

The biggest difference between a preliminary title report and a title report is the level of protection they offer. Title Reports also come with title insurance, which provides coverage and financial protection in case of any undiscovered issues that may arise in the future.

Who Orders The Preliminary Title Report?

In a real estate transaction, the seller must request the preliminary title commitment from the title company. The seller must initiate the PTR process once the escrow is opened. They must collaborate with a reputable title company to obtain the PTR.

What Does A Preliminary Title Report Look Like? 

The format and content of a preliminary title report vary slightly, but it's quite well structured.

Here are the sections you’ll come across in your report:

Property Information

This section covers the details of the property’s legal description, address, and parcel number.

Current Owner

This section provides information about the current property owner or owners.

Vesting Information

This section of the preliminary title provides details about how the property is held (joint tenancy, tenancy in common, etc.).

Title Company Information

This section provides information about the title company that prepared the report.

Effective Date

This is the date on which the preliminary title report was prepared.

Ownership and Encumbrance

This section lists any liens, encumbrances, or restrictions associated with the property's title.

Legal Description

This is a detailed legal description of the property (sourced from public records).

Schedule A

This is a summary of the property's title, including:

  • The current owner's name
  • The vesting
  • Any exceptions to the title policy

Schedule B

This is where you’ll find a list of standard exceptions that are not covered by the title insurance policy, i.e., governmental regulations, survey issues, and so on.


This section provides details about any conditions that must be satisfied before the property can have a marketable title.

Plat Map

This is a map or diagram showing the property's boundaries.

Legal Counsel

This section provides information about whether legal counsel has reviewed the preliminary title report.

Contact An Expert To Secure Your Real Estate Transactions

Need help with preliminary reports? You can count on us! CertSimple USA is a family-owned and operated tax documentation company; we’ll help you understand the report's findings, negotiate any necessary changes, and ensure a smooth transaction.

Do you have questions about prelim reports? Or maybe you want to make one for your property to ensure complete transparency in the process? Whatever the case, we’re here for you; don't hesitate to contact us!