I learned this morning that the title company in a transaction I’m involved in will be unable to issue a preliminary title report for an undetermined period of time. They will provide us a forecast of costs and time in 5-7 business days.
That won’t work, so the parties are switching to the title company that handled the last transaction. That company should be able to issue the preliminary title report in a few days.
I would not consider representing a party in the purchase or sale of real property without the assistance of a title company, and yet many attorneys do not use an escrow company at all when title is transferred from one spouse to the other in a property division. They may rely on an appraisal, which should include a list of all recorded liens against the property, and should also flag any open permits. The opinion of value should take both the liens and the open permits into account. But it will not identify and consider issues with title.
Also, while the appraisal may provide a reasonable estimation of the value of the property, it does not provide the party receiving the property with recourse should the appraisal fail to identify liens, open permits, or, most importantly, should issues with title arise.
The costs of escrow and a title policy are miniscule compared to the potential losses a party might suffer if conditions are not as they assumed when accepting the transfer of title.
Title and escrow companies offer a range of services, so please consider advising your clients to investigate them.
