How Much Does a Preliminary Title Report Cost?
A preliminary title report refers to the legal document obtained after a home’s title has been reviewed by a lawyer and cleared of any obstacle for selling. Also known as a settlement statement, the preliminary title report usually enumerates all settlement costs to both the buyer and seller of the property, title commitment, and a title insurance policy.
With this document, the buyer is protected that the property he or she acquired is free of a clouded title, while the seller is assured that there are no existing liens on his property that has to be paid at settlement.
How much does it cost?
- Generally, a preliminary title report is going to cost you around $25 to as much as $125.
- According to the information given at Justanswer.com, the cost of a preliminary title report is usually less than $50 each.
- A detailed answer on the website ForeclosureRadar.com, a user stated that you should expect to pay around $25 to $100.
What is going to be included?
- A title report contains these important elements that should be reviewed carefully both by the buyer and seller.
- Legal description. This gives you a description of where exactly the property is located, including the boundaries of the property in relation to the nearby roads and intersections. If you are settling for a condominium or a Planned Unit Development, the document should state the property’s interest in any public spaces, easements, and the specifics on any storage or parking that are included in the property.
- Property taxes. This should be clearly stipulated as the primary lien on a title report. Note that a property cannot be transferred to the buyer unless all outstanding property taxes are paid to the city, county, or town.
- Mortgage liens. Generally, these are enumerated first, second, and third directly below property taxes.
- Convenience. A preliminary title report is a great way for both the buyer and seller to save time and hassle.
- It usually takes less than 24 hours to work up a report.
- On the buyer’s end, this shows that the seller is clear of all defaults on the home.
What are the extra costs?
- There are actually two types of title reports: the preliminary title report and the full title report. While title reports are free of charge if you have an account with the title company with whom you are dealing, you might be required to pay for title insurance. SEE: “How much does title insurance cost?“
- If you are having this drafted by a lawyer, the price of the preliminary title report will cost more than the simple filing fees.
Factors that influence the price:
- The preliminary title report will show the seller a good estimate of costs associated with the property in negotiation; but the final amount may end up being less or more, depending on certain elements that the representative and the title company have no control of, such as property tax amounts, and any liens that may be revealed at the time of closing the deal.
- Even though it may seem that a preliminary title report is a waste of money, it is a huge selling point. If a potential buyer sees that you have one, it will make you seem more trustworthy and will make the transition go much more smoothly.
Tips to know:
- If you are a seller or buyer of a property, you should contact a trusted real agent to represent you throughout the negotiations. A reputable real estate professional has access to records and evaluations required in providing both parties involved with a preliminary estimate of all closing settlement amounts for a property.
- When reading a report, it is very important that you pay close attention to the owner’s name, type of estate, the taxes, easements, CC&Rs, deed of trust recording, tax liens, legal description and the plot map.
Questions to ask
- Does a preliminary title report enumerate the complete condition of the title to a property?
- How much does title insurance cost?
- Will I be protected against title risks before closing the real estate deal?
How can I save money?
- Choose an attorney whom you can trust to represent you well, and not only focus on the cost. The cheapest you get may not give you the service you want. Don’t know where to look for an attorney? Try finding one through LegalMatch.com. You can also ask your real estate agent for suggestions of lawyers you could use.
- As a buyer, you must spend some time to read and review the preliminary report at the onset of your transactions in order to avoid hidden costs and potential problems prior to closing the deal.
- There are ways to get this report for free. If you are closing on a home, talk with you real estate agent and the escrow officer in charge. Before the home closes, the escrow agent may be able to show you this title report at no charge.