What to look for in title report

Question

If I am buying a property through escrow (in CA), and get title insurance, is there anything i need to worry about from a clean title perspective?

Also, what do i look for in the prelim title report?

I would think look at the summary page which outlines that the title will be provided with the blah blah exceptions: 
1. property taxes
2. supplemental taxes
3. any other city/county bond related payments
4. any easements for walkways/electricity lines etc to a public utilitity company

I see a lot of verbiage in those reports which seems boiler plate, like exceptions, deductibles, etc.

Whats a smart way to ensure you are getting good title? Or if you are buying title insurance you are ok?

Usually the bank ownes 75-80% of the asset, and you have to buy them title policy (as a buyer). So i was guessing they would ensure title is clean. But if I am buying all cash, what should i look for?

Peter Walther · Answer

Make sure you check the commitment before you close, when you get the policy itâ€™s too late to do anything, you've already bought any problem there is.

Vikram is right, check the legal, not the address but the legal and make sure itâ€™s the property you expected, all the property.  You would be surprised how many times mistakes are made.  The requirements arenâ€™t too important to the buyer; they're generally things the seller has to do to perform though if youâ€™re getting a loan that will be there.

The exceptions will list out the restrictions and easements that affect the property and you want to read them and understand them.  You don't want to find out after the fact that you can't use the property the way you wanted to or thereâ€™s a gas pipeline easement running through the backyard  you didn't know about.

Make sure there isn't going to be an exception for mechanics liens in the policy, especially if the property has just been rehabbed, you don't want to get to pay the subs who did the work.

Get a survey or at least make sure there won't be a survey exception in the policy.  I can't tell you the number of times I've had claims where the house the insured is living in actually sits on a different piece of property.

Jimmy H. · Answer

To add to Vikram's response: if your getting title insurance, then you should be fine all around, as down the road if anything comes up, the insurance will take care of it.

Of course, I have never heard of such  an instance where a claim was made on the title insurance; And we all know how fun making an insurance claim can be.

To that end, I would make sure your getting title insurance through a reputable firm

Vikram C. · Answer

You are right that the exceptions area usually has a lot of standard stuff in it.  Here's what I look for:

1.  I make sure the legal description is correct so that it is the property I am buying.

2.  Look for stuff that has been recorded with a recording number.  This sometimes seems to be in the exceptions section and sometimes in a "requirements" or "conditions" section.  This is where you will find previous deeds of trust, specific easements granted, etc.

3.  If you get a title commitment, it will usually have a list of requirements that need to be satisfied, such as payment of overdue property taxes, HOA fees, etc.  This list should also include any deeds of trust that need to be released and reconveyed.

What to look for in title report

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