What Is A Title Report and Title Insurance In SFR Investing?

A title report provides a comprehensive written assessment of property ownership status. It details the property description, names of current titleholders, how title is held (such as joint tenancy arrangements), applicable tax rates, and any encumbrances like mortgages, liens, or deeds of trust.

Reports issued when ordered are called preliminary reports or “prelims,” while updated reports issued at recording time serve as final title reports. The historical record of title is called an abstract.

Title companies, abstractors, attorneys, or escrow companies typically present title reports depending on local practices. Title insurance normally backs the report’s accuracy, requiring the insurance company to either correct errors or pay damages resulting from title clouds, encumbrances, or flaws not previously reported.