Regardless if you pay cash for an investment property or get financing, you want a thorough review of a title report. When you pay cash, you can obtain an owner’s title insurance policy and if you get a loan to finance the real estate, the lendertitle report and real estate will require at least a lender’s policy. What’s in a title report?

There are two reports that you’ll review, the first is called, appropriately, the “preliminary” title report and is the most recent copy the title insurer has on file. When a lender orders a new title report, the information is updated to contain any recent changes that might not appear on the initial report called the Title Commitment.

 The report is divided into four basic sections, called “schedules” A, B, C and D. Schedule A exhibits the basic information about the transaction about to take place including the effective date of the title insurance policy, amount, name and address of the current owner and the legal description of the property.

Schedule B lists events and items that title policies do not cover in general as well as any easements, rights-of-way and conditions and covenants issued on the property. Standard items not covered are things such as claims that may exist but not recorded or warranting that property lines are where they are supposed to be.

Schedule C lists the requirements that must be settled on or before the closing can take place. All recorded liens against the property including prior mortgages, judgments or property tax liens that are not released must be so before the property can change hands.

The final schedule, D, identifies the title insurance company, the underwriter of the policy and how the title insurance funds paid at the closing table is distributed among the settlement agent, attorney and underwriter.