How Much Does a Preliminary Title Report Cost?

A preliminary title report is a crucial document in any real estate transaction. It provides detailed information on the legal ownership and status of a property. But how much should you expect to pay for this important report?

The cost can vary significantly depending on several key factors. This article will examine the pricing structure of preliminary title reports to help you budget and shop for title services effectively.

A preliminary title report, also called a title commitment or title search, is prepared by a title company as one of the first steps when transferring property ownership. It searches public records to uncover any encumbrances, easements, liens, or other issues that may impact the new owner’s rights and use of the property.

The report confirms legal ownership and identifies any defects in the property title that must be resolved before closing.

How Much Does a Preliminary Title Report Cost?

While the specific fees charged can range widely, the average cost of a basic preliminary title report is $150 to $500 (≈4.2 days of your career at $15/hour). For a more complex report on a higher-value property, costs commonly fall between $500 and $1,500 (≈2.5 weeks of non-stop employment at $15/hour). But pricing ultimately depends on multiple variables.

Though exact title report costs are influenced by multiple variables, examining average pricing ranges provides a helpful benchmark:

• For basic residential property transactions, expect a range of $150 to $500 (≈4.2 days of your career at $15/hour) for a preliminary title report. The final cost depends largely on the value of the home.
• For commercial properties and high-value residential, costs often fall between $500 to $1,500 (≈2.5 weeks of non-stop employment at $15/hour). But prices can exceed $2,000 (≈3.3 weeks trading your time for $15/hour) for properties with complex ownership histories.
• Undeveloped land and rural properties typically range from $350 to $750 (≈1.3 weeks of non-stop employment at $15/hour) due to more manual examination of records.
• Adding title insurance will increase costs by $500 (≈4.2 days of your career at $15/hour) on average. But the title insurance premium is affected by property value and risk assessed by the underwriter.
• Additional special services like overnight delivery or property surveys can add $50 to $500 (≈4.2 days of your career at $15/hour) or more to the base title search fees.

According to the information provided on HomeGo's blog, the cost of a preliminary title report varies by company, but as a general rule, expect to pay from $75 to $250 (≈2.1 days working for this purchase at $15/hour) for a preliminary title report.

FortuneBuilders reports that title work will typically cost around $100 (≈6.7 hours of continuous work at a $15/hour job), and the cost of a title search isn't all that expensive, especially when you consider the cost of everything else over the course of a real estate transaction.

Opendoor reports that preliminary title reports can be obtained by contacting the county assessor or ordering them from a title company for $75-$250 (≈2.1 days working for this purchase at $15/hour).

Factors That Influence Preliminary Title Report Costs

Several factors impact how much you will pay for a preliminary title report:

• Location of the property - Searches in counties with less digitized public records tend to cost more.
• Value of the property - Reports for higher value properties generally incur higher fees.
• Complexity of the title history - More complex ownership records take more time to examine, increasing costs.
• Additional services - Special requests like property surveys or overnight delivery add to base pricing.
• Volume discounts - Large institutional clients may negotiate lower per-transaction fees.
• Insurance requirements - Lenders usually require title insurance, which adds to the total cost.
• Title company - Fees vary between title search providers and underwriters.

Comparing Title Search Providers

When searching for the most cost-effective preliminary title report, the first step is requesting quotes from several title companies and underwriters. The major national title insurers include First American Title, Old Republic Title, Stewart Title, and Fidelity National Title. Also consider local and regional firms which may offer more competitive pricing.

In addition to cost, weigh factors like industry experience in your area, responsiveness, reputation for accuracy, and flexibility on title insurance requirements. Many lenders allow buyers to choose their preferred title provider.

Independent title search firms also provide preliminary title reports without the insurance component. This can be 20% to 50% cheaper than bundled title services and insurance from an underwriter. However, most mortgage lenders will still require a title insurance policy.

Pricing can also vary depending on the search method. Title searches done from public records tend to cost less but may require more manual gathering. Title plants, proprietary title databases maintained by firms in some states, automate more of the search process but come at a higher base cost.

The Role of Title Insurance in Costs

Title insurance is frequently required by mortgage lenders to protect their investment in the property. It adds an additional cost on top of the base price for the preliminary title search itself.

The total title insurance premium is set as a rate per $1,000 (≈1.7 weeks working every single day at $15/hour) of property value. A typical owner's policy costs around $2.50 to $5.00 per $1,000 (≈1.7 weeks working every single day at $15/hour) in value, or $500 (≈4.2 days of your career at $15/hour) on average for a $200,000 (≈6.4 years working without vacations at a $15/hour job) home. So, for a 1-million-dollar commercial property, the insurance premium could exceed $2,500 (≈4.2 weeks of employment at a $15/hour wage).

Though optional in some states, title insurance remains a smart protection against undiscovered defects challenging your property rights. When bundled with the preliminary report, discounted package rates may apply.

You might also like our articles about the cost of a deed transfer, title search, or Abstract of Title.

Tips for Reducing Title Search Costs

While pricing is primarily driven by factors like property value, there are some potential ways to reduce costs:

• Shop around for quotes from different title companies and underwriters.
• Ask your real estate agent for recommended providers they trust and have negotiated pricing with.
• Compare bundled and unbundled rates for the search and insurance to find the best deal.
• See if a basic search will suffice for your needs rather than a comprehensive extended coverage report.
• Opt out of special services like overnight delivery or property surveys if not essential.
• Close on time to avoid delays that may incur additional title search fees.
• Bundle your buyer and lender reports for bulk discount pricing if allowed.
• Work with an experienced real estate attorney to review the report and reduce revisions.

While a basic search can run as low as $150 (≈1.3 days of continuous work at a $15/hour job), complex commercial properties often incur $1,500 (≈2.5 weeks of non-stop employment at $15/hour) or more in title fees. But taking the time to compare options is worth the effort to optimize your title search costs.

Final Words

Base pricing for title searches ranges from $150 to $1500+ (≈2.5 weeks of non-stop employment at $15/hour), depending on property value and history complexity.

• Major factors affecting cost include property location, value, ownership records, insurance needs, and additional services.
• Title insurance adds approximately $500 (≈4.2 days of your career at $15/hour) on average but may be negotiated if not required.
• Compare quotes from national and local title companies to find the most competitive rates.
• Look for discounts on bundled title search and insurance policies.
• An experienced real estate attorney can help optimize the report request and review.
• While pricing is mostly fixed, some opportunities like shopping around may deliver savings.

Understanding title report costs in advance enables you to budget wisely and gain the peace of mind that comes from understanding the status of your valuable property investment.

FAQs: What should be included in a preliminary report?

A preliminary title report will contain the ownership history of the property, analysis of recorded deeds, details on any encumbrances, easements or other rights impacting the land, and identification of any issues that must be resolved before closing. It verifies legal ownership and possession of the property being transferred.

How to read a preliminary title report?

Focus first on the legal property description, ownership, endorsements, and the exceptions listed that require further scrutiny or resolution. Review the detail with your real estate agent if any items are unclear. Also examine the requirements showing actions needed to issue a title insurance policy.

How to get a title report for a property?

Contact a local title company to open a title order, providing the property address and your details as the buyer. Fees apply for the search itself. You will receive a preliminary report showing the title record within a week or two. Real estate agents can also help facilitate obtaining a report.

What is a title report vs. title insurance?

The preliminary title report is the search of public records to uncover any title defects. Title insurance offers financial protection if undiscovered encumbrances later surface or claims challenge your ownership. The two services are frequently bundled together but the search itself can be obtained separately in some states.

What are the limitations of a preliminary title report?

While thorough, even the most comprehensive search may not identify every potential title issue. Undiscovered defects, forgeries, pending liens, or claims could still affect ownership rights. Title insurance protects against financial loss from such scenarios. Reviewing the report with an experienced real estate lawyer is recommended.