What role does a Preliminary Report play in the real estate process?
A preliminary report contains the conditions under which the title company will issue a particular type of title insurance policy. The preliminary report lists, in advance of purchase, title defects, liens and encumbrances which would be excepted as well as any exclusions from coverage, if the requested title insurance policy were to be issued as of the date of the preliminary report. These exceptions and exclusions are meant to provide the parties and their agents with notice of matters which would not be covered under the terms of the title insurance policy and should be carefully considered. Thus, a preliminary report provides the opportunity to seek the removal of items referenced in the report which are objectionable to the buyer prior to purchase.
