American Land Title Association (ALTA) Practice Exam 2025 – Your Comprehensive All-in-One Guide to Success!

A preliminary title report is a crucial document in the real estate transaction process, serving as a detailed analysis of the title to a property. It outlines the current state of the title, listing any existing liens, encumbrances, or other issues that could affect the ownership and transfer of the property. This report is typically prepared by a title insurance company before the closing of a transaction.

The significance of this document lies in its role in identifying potential title problems that need to be resolved prior to the transfer of ownership. By addressing any discrepancies or claims beforehand, the parties involved can proceed with greater confidence, knowing that the title is clear and marketable.

This contrasts with other options, which do not accurately describe the nature or purpose of a preliminary title report. For instance, while debts and liens on the property may be noted within the report, it is not solely focused on confirming debts. Additionally, a preliminary title report is not an appraisal of the property; it does not provide a financial value assessment. Lastly, it is distinctly different from a contract, as it does not establish the terms of a sale between a buyer and seller. Instead, it is a summary of title details essential for a successful transaction.