Escrow & Title
In Maine, a 'preliminary title report' is issued before closing to:
AGuarantee the title to the property
BReport on the current condition of title and potential issues to be resolved before closing✓ Correct
CReplace the need for title insurance
DServe as a substitute for a full title search
Explanation
A preliminary title report (or title commitment) reports the current condition of title, identifying encumbrances, exceptions, and issues that must be resolved before the title company will issue a title insurance policy at closing.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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