What is an Abstract of Title?

An Abstract of Title is a document that lists the transactions related to a certain piece of real estate. The title referenced in the term is the property deed. The abstract of title is an important document for real-estate analysis. It shows all of the transactions a particular piece of property has been involved in, including sales, transfers, and other important information.

How is an Abstract of Title Used?

Certain types of transactions are cataloged under a registry system. The registration system for titles and other real estate transactions is based on the Real Estate Conservation Registry. Most titles that involve the transfer of property or property rights must be recorded in the registry.  An abstract of title serves two key purposes: preparation and prevention. In terms of preparation, an abstract of title is used by lawyers and other professionals in a preparatory capacity to ensure that all of the necessary property titles (ownership history) are in order. Usually, these documents are used to verify one party's ownership of the property in question before a transfer of ownership contract is signed. Essentially, an abstract of title prepares a contract for a valid and lawful execution. Abstracts of titles also serve in a preventive capacity. Lawyers use these types of documents to assure their clients that the paperwork for their real estate transaction is in order. By verifying the sellers rightful and complete ownership of the respective property, a lawyer assures his client that there are no third parties that could challenge either the clients claim to the aforementioned property. An abstract of title prevents the effectiveness of future litigation that disputes the property rights by providing a solid and indisputable legal foundation on which a legal argument can be built. A proper abstract of title is an integral part of any real estate rights transaction. Its preparatory function enables attorneys and contract parties to close on deals quickly and efficiently, with full confidence that an executed contract will be valid and fully enforceable in a court of law. Additionally, an abstract of the title gives lawyers an air-tight legal argument in the event that the validity of an agreement is attacked legally.

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