A property abstract refers to a collection of legal documents that carries ownership records of a piece of land. It typically include references to deeds, mortgages, wills, probate records, court litigations, tax sales and any such other legal document.
Professional abstractors may use their own records, if the work had been previously completed, or most often visit the appropriate government office to retrieve all required documents. After reviewing all the documents, professional abstractors summarize all of the data into a condensed title abstract report. Title abstracts are helpful in knowing the entire history of the property's ownership.
When you buy real estate property, you become the owner of it when someone gives you the title deed of the property. However, you will get ownership rights only of the title deed is valid. Even if the deed seems valid, there may be an unpaid mortgage attached to it, which was taken up to sixty years ago. No matter how much time is passed, if there is an outstanding mortgage attached to a title of property, it will eventually cancel all the deeds issued since then. Thus, when you purchase real estate, it is essential to assess the validity of the deed.
Professional abstractors assesses the validity of every real estate owner's property interest to determine if there is any unbroken chain of ownership from the date the property was transferred many years ago until the current date. A standard full property search is 60 years, but could be less if acceptable to the loan and/or insurance underwriters.
Most buyers and sellers are required by the lender to purchase title insurance as a protection against prior property transfer errors or claims of prior heirs, when purchasing real estate. The Title Insurance underwriter will require a Title Abstract to be completed prior to issuing the policy.