One of the most important documents you’ll encounter during the home closing process is the title report. While it may not garner the same attention as the purchase agreement or the closing disclosure form, it plays a key role in protecting your real estate investment.

What Is a Title Report?
A title report is a document that outlines the legal status of a property’s ownership. It’s typically ordered by the title or escrow company once a purchase agreement is in place. This document is used to confirm that the seller has the legal right to transfer ownership of the property. It also identifies any issues (such as liens, claims, or encumbrances) that could affect the buyer’s ability to take ownership of the property free and clear.

In Virginia, title reports are often referred to as “title commitments” or “title binders.”

What Does a Title Report Include?

The components of a title report may vary slightly depending on the location and complexity of the property, but it generally includes:

1. A legal description of the property

This section provides a precise, legally recognized description of the property, including its boundaries, lot number(s), and placement within a subdivision or survey area. Beyond the street address, it serves as the formal definition of the property.

2. The property’s chain of title (ownership history)

The report will document the current owner and trace previous transfers of ownership. This history helps confirm that the title has passed properly over time and that the seller has the legal authority to sell the property.

3. Liens and mortgages

Any existing liens (including mortgages, tax liens, judgment liens, or mechanics’ liens) will be listed in the report. These must typically be resolved or satisfied before closing, as they can compromise the buyer’s legal ownership of the property.

4. Easements and restrictions

Easements grant others limited rights to use part of the property (for example, utility access), while deed restrictions may impose limitations on how the property can be used. Both are important for understanding the buyer’s rights as the future property owner.

5. Encroachments

Encroachments occur when a structure or improvement extends beyond the property’s legal boundaries, either onto neighboring land or vice versa. These can create legal disputes and may need to be addressed prior to closing.

6. Pending legal actions

If the property is involved in any litigation (such as divorce proceedings, probate matters, or bankruptcy), those details will be reflected in the report, as they may affect the seller’s ability to transfer the title free and clear.

7. Tax information

The title report will indicate whether property taxes have been paid and if there are any outstanding assessments or tax liens that need to be settled before closing.

8. Surveys or plat maps

Depending on the location, the report may include a survey or plat map showing the lot’s dimensions, boundaries, easements, and structures on the property.

Why a Title Report Matters

A title report is more than a formality. It’s a critical step in the closing process and is necessary for protecting your real estate investment. Here’s why it matters:

• It confirms clear ownership – The title report verifies that the seller has the legal right to transfer the property, ensuring you receive full ownership without unexpected claims from others.
• It identifies legal and financial risks – By highlighting any title issues such as liens, unpaid taxes, or encumbrances, the report gives buyers and lenders a clear picture of potential risks that need to be resolved before closing.
• It is required for title insurance – The findings in the title report form the basis for issuing title insurance. Lenders require a lender’s policy to protect their interest in the property, and buyers are strongly encouraged to purchase an owner’s policy to protect their personal investment.
• It helps prevent delays at closing – By identifying issues early in the process, the title report gives the necessary parties time to resolve them. This helps avoid last-minute surprises or hidden issues that could delay or derail the real estate transaction.

The title report may not be the most visible part of the homebuying process, but it is one of the most important. It ensures that the property you’re purchasing is legally and financially secure, and that you’re receiving what you’ve agreed to buy. 

Working with an experienced title company helps ensure the title report is accurate, thorough, and resolved well in advance of closing. To learn more about title reports or the closing process, contact the team at Linear Title and Escrow today.