Reading a title report is essential to verify legal ownership, uncover liens, and identify property restrictions before closing. check for breaks in the chain of title during your report review Buyers should carefully review each section—especially Schedule B—and always check for breaks in the chain of title during the report review. Overlooking such gaps can lead to legal and financial risks, even with title insurance. This beginner-friendly guide helps homebuyers, investors, and agents make informed decisions and protect their property investments.
What Is a Title Report?
A title report is a comprehensive document prepared by a title company during the homebuying process. It outlines the property’s legal ownership, reveals any claims or liens, and lists restrictions or easements that may affect how the property is used.
Why it Matters:
- Confirms the seller’s legal right to sell
- Uncovers potential red flags (like unpaid taxes or unresolved legal disputes)
- Required by lenders before issuing a mortgage
The Structure of a Title Report: Key Sections Explained
Let’s explore the core parts of a title report so you can read and understand it with confidence.
1. Title Search Findings
This section identifies the current legal owner(s) of the property.
- Look for: The seller’s name should match your purchase agreement.
- Red flag: If ownership isn’t clear or multiple names appear without context, ask your agent or title company for clarification.
2. Legal Description
This is a detailed geographical description of the property boundaries and location.
- Look for: Legal terms like “Lot,” “Block,” and subdivision names.
- Pro Tip: It may be complex, but ensure it aligns with your county’s property records.
3. Liens and Encumbrances
These are claims by outside parties that affect the title.
Common Types:
- Mortgage liens (existing home loans)
- Tax liens (unpaid property or federal taxes)
- Mechanic’s liens (unpaid work or materials)
- Look for: Liens listed with reference numbers, amounts, and creditor names.
4. Easements and Restrictions
Easements allow others to use part of your property. Restrictions limit how the property can be used.
Examples:
- Easement for utility company to run power lines
- HOA rules preventing certain renovations
- Acceptable: A sidewalk or shared driveway easement
- Concerning: Restrictions that clash with your intended use (e.g., renting out a home in an HOA that bans rentals)
5. Schedule A vs. Schedule B
Schedule A: Summarizes the insurance details
- Property address
- Legal description
- Buyer and seller names
- Policy coverage amount
Schedule B: Lists exceptions to the title insurance policy
- Items not covered (unrecorded easements, boundary disputes)
- Must be carefully reviewed to understand your risks
- ✔️ Action: Review Schedule B with your title officer and consider endorsements for added coverage
A Real-World Example: Reading a Title Report
You’re purchasing a home for $450,000. Here’s what the title report reveals:
- Current owner matches your seller
- Legal description matches the tax assessor’s map
- Mortgage lien for $300,000 with Wells Fargo
- Mechanic’s lien for $5,000 from a roofing contractor
- Easement for a community walking trail
What to Do:
- Ask the seller to resolve the $5,000 lien before closing.
- Review the walking trail easement with your agent to ensure it doesn’t affect plans to install a fence.
How Title Reports Can Save You Thousands
Here’s how overlooking a title issue can lead to major costs:
| Title Issue | Potential Cost to Buyer |
| Unpaid property taxes | $2,000+ in back taxes |
| Contractor lien | $5,000+ legal disputes |
| Unclear ownership | Property ownership challenges |
| Boundary dispute | $10,000+ in survey/legal fees |
Remember: Even with title insurance, your coverage depends on what is disclosed and insured. Understanding your title report gives you control.
Common Mistakes to Avoid
- Not reading the report: Don’t assume your agent or lender will catch every detail.
- Ignoring Schedule B: This section reveals risks not covered by title insurance.
- Overlooking easements: An easement might allow others to access part of your property.
- Assuming title insurance covers everything: It only covers what’s listed as insured.
Final Thoughts: Know Before You Close
Reading a title report may feel intimidating, but it doesn’t have to be. With a basic understanding and the right questions, you can spot issues early, protect your investment, and move into your new home with confidence.
Your next steps:
- Review your title report line-by-line
- Talk to your agent or title company about concerns
- Use available tools to estimate costs and search liens
FAQs
Do I need to read the entire title report as a buyer?
Yes. Even if your agent or title company offers a summary, reviewing the full report ensures you won’t be blindsided by surprises.
What happens if there’s a lien on the property?
It usually must be resolved before closing. You can request the seller clear it or renegotiate the terms.
What’s the difference between Schedule A and Schedule B?
Schedule A outlines what’s being insured. Schedule B lists what’s not covered by the title policy.
Can I dispute items in the title report?
Yes. If something looks wrong or confusing, raise the issue with your title officer or attorney right away.