What is a “preliminary title report”?

A preliminary title report is an essential tool in real estate transactions, providing vital information about a property's legal status. This document includes details about the current ownership of the property, identifies any existing liens or encumbrances that might affect the property, and reveals potential issues that could impact a buyer's decision to proceed with a transaction. By outlining these aspects, the preliminary title report helps ensure that all parties involved understand the legal standing of the property before any formal agreements are made, thus protecting both buyers and lenders in the process.

The other options do not accurately define what a preliminary title report entails. For instance, outlining a property's boundary lines relates to surveys rather than title issues, mortgage approvals involve a different set of documentation primarily focused on financing, and property tax assessments pertain to valuations for tax purposes, which is separate from understanding legal ownership or encumbrances on the property itself.