Sellers Requesting Title: Moving the Title Report Earlier in the Transaction

Home sellers should be required to order the preliminary title report at the time on listing. It should be provided to potential buyers along with seller’s disclosure, lead based paint form, etc. I realize the title process can differ across states, but this should be standardized.

In many states, title doesn’t get ordered until the home is under contract and the buyer’s mortgage company requests it. Turnaround times can be a week or more. This is way too late in the process to learn of clouds on title.

Jeremy Potter, an innovative thought leader in real estate, suggests that we need real time land records. While I completely agree, this is probably a long ways off. Moving the preliminary title report earlier in the transaction process allows the seller and listing agent to uncover any clouds in the title. For example, is the home currently tied up in probate? If so, the sellers aren’t legally able to sign a listing contract until the probate process is finished. Do the sellers have liens that need to be addressed?

Ordering preliminary title reports right away also gives the listing agent the negotiating details they need to have when an offer comes in. For example, if the seller has a judgement or unknown lien on the property and doesn’t have the cash to pay it at closing, this will impact the final contract numbers. If the buyer wants the house bad enough, the parties can negotiate for a higher price or lower seller concessions.

To innovate the home buying process means we also need to make sweeping industry changes to improve efficiencies. The currently timing of ordering/receiving the title report wastes too many people’s time when issues are uncovered. Ordering title early as a requirement will improve this.