“Buy land, they aren’t making any more of the stuff.” was famously quoted by Oklahoma’s own favorite son, Will Rogers. It’s true, land has always been here and none of it is new, even if the home that sits on it is. Every piece of land has a history and that is essentially what the abstract details.
It’s important to understand the property history to ensure that your ownership after this transaction is uncontested and that you legally own the land, the house and that there isn’t any cloud on the title. The attorney in this transaction (hired in the title process) will examine the abstract looking for items like back taxes owed, liens on the property for outstanding creditor bills, encumbrances, conveyances, and any legal actions that involved the property in the past. It even looks for things like unresolved building code issues and other details.
An abstract begins at statehood with the very first recording, the initial grant deed, and is followed by every instance where the property title changed hands. They are usually quite thick, but it depends on how many times the property has changed hands.
This is an example, the first page describes the property, then pages thereafter go into each transaction or exchange and incidents within each ownership.
Where Does Abstracting Fit Into The Mortgage Process?
When your real estate contract and initial loan disclosures are signed, we move into ordering for those outside orders and that includes title work. The abstracting is done as part of the title work, in fact because bringing the abstract up to date from it’s last transaction can take time, that is usually title’s first step: to order the abstract and bring it up to date. Then the abstract is sent to the attorney for review. All of this can take a couple of weeks to complete if there are no issues that take longer.
Then the title work, including attorney opinion, is sent back to my office so we can submit to underwriting to show that we have a clear, uncompromised title. The abstract is a large portion of what constitutes clear title work, and the attorney opinion, combined with title insurance (which we’ll talk about in another post) mitigates the risk of anything coming up in the future questioning the pending ownership of this property.
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