What Is and Why You Need A Preliminary Title Report

We're tackling a topic that is often overlooked but crucial in any real estate transaction, the preliminary title report. As a seasoned broker, mentor, and investor with over 40 years of experience, I can't stress enough how important it is to understand what a preliminary title report is and why you need it. Remember, if after this video you need more help, book some time with me, Zoom, phone call, or in person. The link is down below. Hi, my name's Joe Homs, and I flipped hundreds of homes here in Southern California. I have over 40 years of experience. I've been a broker, mentor, and investor, and I want you to like, subscribe, and share this content with your friends. What is a preliminary title report? It is a report that is generated by a title company. Title company is an insurance company that's going to look at Everything that has transpired with this property from the time it was built to today. All the loans that were on the property, any transfer of deeds, everything until today. And once everything's looked at and is satisfactory to everybody, they will give you an insurance policy that basically says— Here you go, the property is free and clear as of today, and if anything arises after you close, we the insurance company are on the hook and responsible to pay for whatever it is that we missed. Do you think they're perfect? No, nobody's perfect. We're all human, we all make mistakes, but Not getting title insurance is going to put you behind that 8-ball, and if something happens, it may literally cost you thousands, hundreds of thousands of dollars. If not, if you get that title insurance and everything on the prelim has been taken care of, they're on the hook for it and not you. So very, very, very important that you get preliminary title report, read it over, make sure everything is good on there. And if there is any loans or anything, liens or anything like that on there, that they get taken care of during escrow. If you like these type of videos, do me a favor and hit that like button. The preliminary title report will mitigate risk And give you the assurance that there is clear title on that particular property. That's what it's for. And can you imagine, again, you know, investing like when I started 40 years ago? They would literally search records by hand to make sure that there wasn't something that was, you know, recorded 2 days ago by a contractor putting a lien on a property 2 days before you get ready to close. A lot of that stuff, in fact most of it, is electronically done now, so it's a lot easier for them to search for records. But again, we're all human. Sometimes we make mistakes. Sometimes that, you know, deadline is really close and they don't pick it up. That's why you want to have title insurance. Let's talk about working with title companies, and there's a lot of title companies out there. Probably the biggest one here in California and maybe throughout the U.S. is First American Title. And I honestly, title companies are title companies are title companies. I work with the title officer, the title rep. Those, those are the relationships that you need to establish when you're working with somebody at a title company. When I work with somebody at First American, let's say, by the way, his name is Noah Presswood if you want to look him up, really great guy. It is, hi Joe, how can we help you today? Can you run this title for me? Let me know if there's anything suspicious on there, and if there is, is there a way to resolve that other than, you know, let's say paying off the contractor lien? Sometimes they can work around some of these False title claims that are made fraudulently. But you need to know that from the title representative that you're working with. So that's the relationship that you need to have is with that title rep or the title officer, both. I recently closed a transaction, believe it or not, in 3 days. We opened up escrow on a Wednesday. There were, there were some title issues. And we closed on a Friday, which is really pretty much unheard of. But because I've had that great relationship with my escrow company and the title company, they were able to get through all those issues in a 3-day period. Does it happen all the time? No. Did it happen because I've been doing this for a long time and I have that good relationship with them and they know me and they trust me? Yes. That's probably why. It can be done. It just— you need to establish that relationship, whether it's with First American or Noah, which is a great guy. Make sure that you have that relationship with whoever it is that you're working with. Understanding what a preliminary title report is and why you need it can save you from potential headaches and protect your investment. Have you ever encountered a title issue that you discovered through a preliminary title report? Share your experiences down below. And if you've If you found this video helpful, don't forget to give it a thumbs up and subscribe to my channel. And if you want to learn more about investing, click on this video right here. Feel free to reach out. I'm always here to help. Thank you.