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Abstract of Title | Real Estate Exam Prep Video - YouTube

Channel: The Real Estate Classroom

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hey everybody my name is paul vachesky

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and welcome to the real estate classroom

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youtube

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channel in today's video we're going to

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discuss

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abstractive title uh in my next video

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we're going to discuss

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title search because these two these two

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need to go together because

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they do the same thing it's just the

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processes are a little bit different

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based on the state that they're in so

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abstractive title

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in this video

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hey everybody in this video we're going

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to discuss what's called an

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abstract now when would we use an

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abstract or in the opening i discussed

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title insurance or title search is

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when would we use this well when

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somebody buys a piece of property

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and that period between contract and

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closing

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there are a lot of things that are done

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including inspections for the whole

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house that may be a septic or a well

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so there's things that are going on to

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ensure that the new buyer

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is getting a property that is uh

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you know what they expect part of that

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is what we call

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a title research or an abstract

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where someone is going to research or do

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inspection of the property's history to

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ensure that the new buyer

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isn't going to they're not going to go

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to closing and buy a piece of property

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that has liens against it

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there's clouds on the title those type

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of things and one of the methods of

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ensuring that is called an

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abstract now i got the definition of

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abstract on your screen

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an abstract is a condensed history

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report called a chain of title

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key real estate term you have to know to

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a specific

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parcel of real estate it consists of a

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summary of the original land patent and

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all subsequent conveyances and

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encumbrances

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affecting the property an abstractor

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that's a person they make a

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certification that the history

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is complete and accurate and you can see

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the key

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terms there that we're going to discuss

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so essentially here's what happens

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depending on the state you're in

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most states do what's called a title

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search and then issue title

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insurance a few states do what's called

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abstract for example iowa

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all right and some states can do both

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but you have to know both for your real

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estate exam

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so essentially what's going to happen on

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an abstract is when

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uh that period contract to close the

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buyer is going to hire someone called an

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abstract door and and they're going to

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research the ownership or the title of

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that property

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and i've seen an abstract actually it's

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a book

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it's a chronological book of everything

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and some of it could be two inches thick

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and the abstract can go all the way back

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to the beginning of the land patent

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in the 1800s and if you were actually

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read through this abstract you would

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notice that

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it is as it says on your definition here

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it talks about conveyances and

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encumbrances it's going to have a

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history at

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everybody that's ever owned that

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property when

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property ownership has changed and every

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instrument that was placed against it

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liens for example or easements those

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type of things will all be

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on there and also the removal and they

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also get into the marital or the

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community

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property part of it that's why it's so

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important when we're doing title

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searches and abstracts that

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they know about divorces because there's

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marital interests so on and so forth the

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person is the abstract door

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who's going to make a certification that

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hey i researched this property

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and i find everything to be satisfactory

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i don't and here are the things prior to

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closing that needs to be

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that needs to be resolved otherwise the

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buy the buyer

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is going to receive title or ownership

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to that property

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with clouds on it now what typically

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happens is the abstract exists

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because the original owner who's

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currently i'm sorry the owner that's

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currently living there

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they had the abstract brought up to date

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as of the day of their closing

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so let's say that this owner owned it

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for 10 years they're selling it to me

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i'm going to have an abstract done and

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what we're going to do is called

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updating

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the abstract there's no need to go back

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all the way in to the beginning of land

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patent

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because that's already been done all i

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have to do is hire someone to update

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this abstract or update this history

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report

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from the time that the owner owned it

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the current owner

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to closing so i'm not getting any junk

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that should be the responsibility of the

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current owner so

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again the abstract an abstract door

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will do the research and they'll list

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any additional instruments recorded

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against the property since the current

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owner took title that's called

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updating an abstract now understand this

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is important

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an abstract is a history report it's

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deemed to be accurate but it doesn't

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guarantee

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good title it's not insurance however

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the abstract door who does the research

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is or she is responsible for any errors

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that were made

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so although there it's not guaranteed as

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in with you know insurance like title

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insurance

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there is still a level of protection

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there

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and then what happens after the abstract

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door deems the history report to be

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accurate and they've updated the act

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the the abstract they will send it over

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to the lender's attorney

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the attorney reviews it if the attorney

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gives it a blessing

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then he's he or she's going to issue

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what's called a certificate

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of title which means that the title

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actually belongs to the current owner

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and the current owner

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can pass free clear marketable title

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to the new buyer um

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certificate of title that is another key

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real estate term that you have to know

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so that's the basics of an abstract of

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title the abstract is something that you

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do need to know for your real estate

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licensing

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exam don't forget in my next video in

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fact i'm going to put a link

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right here to my right that is the video

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on title insurance

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which is sort of like the brother of an

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abstract so you have to know about both

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and if you have not if you have not uh

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subscribed to the channel please do so

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click the little circle to the left and

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