A preliminary title report (often called a “prelim”) is a document a title company issues early in a real estate purchase that shows who legally owns the property, what liens, easements and restrictions are recorded against it, and what must be cleared before the company will issue title insurance. It is not a guarantee of clean title and not an insurance policy; it is an offer to insure on stated terms. Reviewing it carefully, ideally within the first week or two after opening escrow, is one of the best ways for a buyer to spot problems while there is still time to negotiate or walk away. This guide explains each section, the red flags to look for and what to do if something looks wrong.
Preliminary title report vs title commitment
The term “preliminary title report” is used most in California and other western states. In much of the rest of the US, the equivalent document is called a title commitment, usually on a standard ALTA (American Land Title Association) form. They serve the same purpose and contain similar information, though the format differs.
| Feature | Preliminary title report | Title commitment |
|---|---|---|
| Where common | California and several western states | Most other states |
| Legal nature | An offer to issue a policy, not a binding representation of title | A conditional commitment to issue a policy |
| Structure | Owner and vesting, legal description, numbered exceptions, requirements | Schedule A (basic info), Schedule B-I (requirements), Schedule B-II (exceptions) |
| Who reviews | Buyer, agents, escrow officer, lender | Buyer, attorney or settlement agent, lender |
What is in a preliminary title report
1. Property address, legal description and plat map
The legal description identifies the parcel by lot and tract, or by metes and bounds. Check that it matches the property you think you are buying, including any garage, parking space or extra lot. Many prelims include a plat or parcel map; compare it with what you saw on site, especially fences and driveways.
2. Vesting: who owns the property
Vesting shows the name(s) of the current owner and how they hold title, such as individuals, a married couple, a trust or an LLC. The names should match the sellers on your purchase contract. If a trust, estate or company owns the property, the title company will require documents showing who has authority to sign.
3. Exceptions
This is the most important section. Exceptions are items the title policy will not cover, and they typically include:
- Property taxes, including the current installment and any delinquent amounts or supplemental assessments.
- Deeds of trust or mortgages securing the seller’s loans, which are normally paid off at closing.
- Liens, such as tax liens, judgment liens, HOA liens and mechanic’s liens from unpaid contractors.
- Easements for utilities, access, drainage or shared driveways.
- CC&Rs (covenants, conditions and restrictions), often from an HOA or the original subdivision.
- Special assessments or bonds, such as Mello-Roos in California.
- Pending lawsuits, recorded as a lis pendens, or notices of default showing a foreclosure has started.
4. Requirements and notes
These list what the title company needs before closing: payoff demands from lenders, releases of liens, a statement of information from buyers and sellers (used to rule out judgments against people with similar names), trust or entity documents and, in some cases, a survey.
How to review a preliminary title report step by step
- Note your deadline. Purchase contracts usually give the buyer a set number of days to review and object to title items. Missing it may mean accepting the title as reported.
- Ask for the underlying documents. The prelim lists exceptions by recording number; ask the title officer or your agent for copies of each easement and CC&R, not just the summary.
- Check vesting and legal description against your contract and what you saw at the property.
- Sort the exceptions into items that will be paid off at closing (seller’s mortgage, tax installment), items that stay with the property (utility easements, CC&Rs) and items that need action (unexpected liens, lis pendens, boundary issues).
- Think about your plans. An easement across the backyard may not matter until you want to build a pool or an ADU.
- Object in writing through your agent or attorney to anything you want removed or resolved, within the contract deadline.
Common red flags and how they are resolved
| Issue | Why it matters | Typical resolution |
|---|---|---|
| Delinquent property taxes | Tax liens have priority and can lead to a tax sale | Paid from the seller’s proceeds at closing |
| Mechanic’s lien | A contractor claims unpaid work | Seller pays or bonds around it; release recorded |
| Judgment lien against seller | Attaches to the seller’s property | Paid or released before or at closing |
| Owner name mismatch | Seller may lack authority to sell | Trust, probate or corrective deed documents |
| Lis pendens or notice of default | Pending lawsuit or foreclosure | Case resolved or loan reinstated; sometimes the deal cannot proceed |
| Unrecorded or odd easements | May limit use or access | Clarified, quitclaimed by the holder, or accepted with a price adjustment |
| Unreleased old mortgage | Paid loan still shows on record | Title company obtains a reconveyance or release |
Who orders it, who pays and how long it takes
The escrow or settlement agent, or sometimes the listing agent, usually orders the prelim from the title company once escrow opens. The cost is normally absorbed into the title insurance premium rather than billed separately, and who pays that premium follows local custom and your contract. A prelim typically arrives within a few days to a week, depending on the complexity of the property’s history. Some sellers order one before listing so they can fix problems in advance.
Your lender will review the prelim as well, because it will require a lender’s title policy. If you are still comparing loan options, our guide to mortgage loan lenders covers what to ask, and our first-time buyer’s guide puts the title review in the context of the whole purchase.
From prelim to title insurance
Once requirements are met and objections resolved, the title company updates its search close to closing and issues the policies after the deed records. There are two main kinds:
- Lender’s policy: protects the lender’s loan up to the loan amount and is typically required for financed purchases.
- Owner’s policy: protects your equity against covered title defects, such as forgery or undisclosed heirs, for as long as you or your heirs own the property. Coverage can often be broadened with an extended or homeowner’s policy and endorsements.
Items left as exceptions in the prelim generally remain exceptions in the final policy, which is why reviewing them before closing matters. Agent compensation has also changed recently in many transactions; see our explainer on the Keller Williams lawsuit for the background.
Tips for sellers: fix title problems before listing
Sellers benefit from the prelim too. Many title issues take weeks to clear, and discovering them mid-escrow can push back closing or give the buyer a reason to renegotiate. Before listing, consider these steps:
- Order an early report from the title company you plan to use and read the exceptions list with your agent.
- Check for old loans that were paid off but never formally released. A lender’s reconveyance or satisfaction can take time to obtain, especially if the lender has merged or closed.
- Settle contractor disputes so no mechanic’s liens are hanging over the property.
- Gather authority documents such as a trust certification, death certificate for a deceased co-owner, divorce decree or LLC resolutions.
- Collect HOA documents and confirm dues are current, since unpaid assessments can become liens.
Terms you will see in a prelim
- Effective date: the date through which public records were searched.
- Vesting: the manner in which the current owner holds title.
- Encumbrance: any claim, lien or restriction that affects the property.
- Reconveyance: the document that releases a paid-off deed of trust.
- Statement of information: a confidential form buyers and sellers complete so the title company can distinguish them from people with similar names.
- Endorsement: an add-on that changes or expands the coverage in a title policy.
Frequently asked questions
Who orders a preliminary title report?
It is usually ordered by the escrow or settlement agent, or by an agent on behalf of the buyer or seller, from the title company once escrow opens.
How much does a preliminary title report cost?
In a normal purchase it is typically included in the title insurance premium. Standalone reports ordered outside a transaction may carry a separate fee that varies by company and location.
Is a preliminary title report the same as title insurance?
No. It is an offer to issue title insurance on stated terms. The actual policy is issued after closing, once requirements are met.
How long is a preliminary title report valid?
It reflects records as of its effective date. The title company updates the search before closing, so a new lien recorded in the meantime would still be caught.
Can a buyer back out because of the preliminary title report?
Often yes, if the contract includes a title review contingency and the buyer objects in writing within the deadline. Check your contract terms with your agent or attorney.
This article is general information, not legal advice. Consult a real estate attorney or title professional about your transaction.
