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What is an abstract of title?

On Behalf of | Feb 19, 2024 | Real estate transactions

One term homebuyers may be unfamiliar with is “abstract,” or more formally, “abstract of title.” What does this bit of real estate legalese mean?

An abstract is a formal term for the thorough title search that must be done when someone decides to purchase a piece of property. Below is some essential information all homebuyers should know.

What does an abstract do?

Abstracts are complete legal histories of the home or land. These written records describe every transaction involving the property from its construction or origin to the present day, including all liens, encumbrances and anything else that could be attached to the property and prevent or delay the transfer of ownership you are seeking.

Who pulls the abstract?

In Arizona, abstracts are prepared by title insurers who are qualified to certify that a property is free of claims, unencumbered and able to be sold. Once the title examiner who is performing the abstract has combed through the sometimes complex legal history of the property in question, they can then issue a commitment stating that all information provided is true and complete.

Why is this necessary?

Before you can purchase title insurance for your property, these title searches are necessary to protect the companies that issue the title insurance that protects both the buyers and the lenders that hold the mortgage. 

While lender’s title insurance is typically mandatory for mortgages to be granted, it is also highly recommended that buyers pay this one-time expense for an owner’s policy to protect their investment from future legal claims against it. If you plan to buy property here in Arizona, it is prudent to learn about the real estate laws affecting your purchase.