What’s in a Preliminary Title Report?
Do you know what to look for in the preliminary title report/commitment? Your agent should, because the report can reveal negative matters that can hurt you. The report shows what matters are on the title of the home, what are excluded from coverage, and what the seller needs to do to remove those matters that can be removed.
The Arizona contract gives the buyer the right to object to adverse title matters and to cancel the contract if necessary. To exercise those rights, the buyer’s agent must know what to look for. Unfortunately, most agents do not have this expertise. The Arizona Association of REALTORS concedes that agents don’t have the expertise to handle this important step, saying that agents should “[r]efer the buyer to the escrow officer or an attorney if there are questions or concerns about the title commitment.”
But what if the buyer doesn’t have a “question or concern”, and there is a title defect that should be investigated or objected to? Failure to object or cancel may mean you will be stuck with a defect that destroys the value of the home. In that situation if the agent doesn’t know what the entries in a report mean, your rights won’t be protected and you will be damaged.
Despite the potential critical nature of the preliminary title report/commitment, agents don’t know enough about it to protect your interests. But I do. This is just another example of the “attorney-broker advantage” you get when use me in a home sale. Don’t accept less, as the inability of your agent to protect you can cost big bucks.