Before signing on the various dotted lines, it's important to confirm that the seller truly owns the property and isn't overlooking problems, such as outstanding mortgage payments or debts. Title companies research these reports using public records, and guarantee the findings by selling title insurance. The preliminary title report, which takes several days to complete, establishes who legally owns the property. The report indicates if the seller is the only person authorized to sell the property, and includes a list of previous owners as well as purchase and sale dates. It also lists any liens against the property.
Sellers usually pay for the report because they are responsible for guaranteeing a clear title.
The seller's real estate agent or attorney often orders the report after opening escrow. Types of title insurance Title insurance, issued by the title company and often required by lenders, guarantees the house is free of liens. An owner's policy protects the buyer from unpredictable factors, ranging from human error to forged documents, that might emerge after a sale is complete. This type of title insurance has no annual premiums. The buyer pays when the policy is issued.