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What Is an Abstract of Title?
Everything You Need to Know

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A property's legal history, as recorded in the property abstract, is vital to understand before purchase.

The abstract contains a list of all documents associated with the real property, such as deeds and mortgages, along with information about former owners and when they owned the property.

As a legal attorney with years of working in real estate, I'm here to tell you everything you need to know about abstracts of title.

Quick Summary

  • A title search costs less if you only want to know some history about the property rather than every little detail.
  • An abstract provides information about the property you're interested in purchasing, such as whether there are any claims against it or title defects.
  • An abstract of the title gives you the peace of mind that you can take ownership of the property free from any legal claims or financial problems.

What Is an Abstract of Title?

Looking and reading the abstract of title The abstract of the title is a document that summarizes all changes to the title of the property over time, in other words, its general history.

It includes the land records, legal activities, initial grant deeds, every instance in which the property's ownership, and other key details like tax liens against it [1]. 

You can find it with the county recorder, reviewed by the public records.

An abstract provides you with information about the property you're interested in purchasing, such as whether there are any claims against it. It's commonly used to help people decide if they want to make an offer to their real estate agent on a piece of land or a house.

A title search only gives you a decade-long overview of the property's history. In contrast, an abstract of the title shows you the legal documents that include the entire history from when it was first recorded as land that someone owned. 

A title search is cheaper if you're interested in learning about the property's history but don't need all the legal documents.

An abstract of the title is more expensive, but it gives you a complete picture of the property's legal history and recorded documents. It's also required if you're going to get title insurance.

The Components of an Abstract of Title

A woman checking every document in folder

A title abstract of the title can be a comprehensive document, depending on the land's history. If this information is obtainable, it will normally include specifics about the first deed and all prior sales (for example, transfers).

Also, it will summarize the following:

  • Property title
  • Initial grant deed
  • Liens
  • Encumbrances
  • Conveyances
  • Legal actions
  • Back taxes owed, such as tax sales.
  • Unresolved building code issues

By reading the existing abstract, prospective buyers can familiarize themselves with any potential problems with the property before a real estate purchase.

For example, if there is a lien on the property, you would know to have the seller pay it off before closing on the house, or else you can lose it in a tax sale. 

If you don't know about this ahead of time and take possession of the home, then legally, you could be held responsible for paying off that debt.

When Do You Need an Abstract of Title?

A woman talking to someone to guide her in writing abstract of title You need an abstract of the title when purchasing a property, especially if you're getting title insurance. Your lender will also require an abstract of the title to ensure there are no outstanding claims against the property that could jeopardize their investment.

Use this information to know what to expect when you're buying a home. An abstract of the title assures you that you can take ownership of the property without any legal or financial problems.

You may also be warned about an issue that's better fixed before taking on the property.

"The abstract of title will also record outstanding liens against the property, back taxes owed, or unresolved building code violations."
- James Chen, Investment Advisor

How Do You Write an Abstract Title?

A person in formal attire writing on a document

To write an abstract title, you should :

  1. Start with the current owner's name and address
  2. List all of the prior owners of the property in chronological order, including any transfer ownership
  3. Include a description of the property, including any easements or rights of way
  4. Describe any liens, encumbrances, or other claims against the property
  5. Summarize any legal actions involving the property
  6. List the date and amount of all sales of the property
  7. Include any other relevant information about the property's history
  8. Have the physical document notarized by a Notary Public

You can get an abstract of title from a title company. These businesses have employees called abstractors trained to understand all the previous property transactions you need to know.

If you're getting title insurance, your insurer will require an abstract of title that meets their standards. Be sure to check with them before ordering an abstract of the title to identify any title defects and avoid any legal issues later on.

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FAQs

Is an Abstract the Same as a Deed?

An abstract is not the same as a deed. A deed is a legal document that transfers ownership of real property from one person to another. An abstract summarizes the legal history of a piece of property.

What Is the Purpose of the Abstract Title?

The purpose of the abstract title is to provide a summary of the legal history of a piece of property. This information can help determine if there are any outstanding claims against the property or identify any potential problems with the property before purchase.

Is an Abstract of Title a Legal Document?

An abstract of the title is not a legal document. It is a summary of the legal history of a piece of property.

Which Is More Important, Title or Deed?

The title and the deed are both important because they each play a role in the home-selling process. For example, during a title search, not only can ownership be confirmed, but the title search will also reveal any liens, loans, or property taxes due.

Schedule a Consultation With a Real Estate Attorney

If you are buying a new property and want an abstract of title, you should consult with a real estate attorney. They will be able to give you the proper tax advice and help you understand the process, and ensure that everything is done correctly.

Contact Shmidt & Clark for a free consultation with one of our top real estate attorneys. We have experience with a wide range of real estate transactions and can help protect your interests.

Reference:

  1. https://www.law.cornell.edu/wex/abstract_of_title

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