An abstract (abstraction of title) is a condensed history of a property’s title. An abstract usually consists of notes on documents pertaining to a title, or in many cases, copies of the documents themselves. Abstracts are required in many title transfers.
To build an abstract, a licensed abstractor will use information gathered from tax records, mortgage records, and other sources to paint a picture of the title’s past. Abstracts commonly include information such as:
- Property tax status
- Purchase price
- Location and size of property
- Detailed names of involved parties including maiden names
- Mortgages
- Liens
- Other encumbrances
- Other transaction terms
The Abstraction Process
- In the course of building an abstract, the abstractor will first seek out documentation that shows the chain of title ownership. Once that sequence has been established, the documents are examined to determine whether the records are consistent and to ensure there are no unresolved tax issues. This can include checking for discrepancies in legal property descriptions, owner names, the use of notaries and witnesses, restrictions, and other provisions.
- Next, information is gathered on the parties that have previously possessed the title. Such information can include mortgage status, the presence of uncancelled judgments, tax liens, or other liens.
- Tax records are then compiled to determine the property’s assessed value, whether the taxes have been paid, who paid the taxes, if there is a homestead exemption on the property, and the amount of taxes paid on the property in the past.
- At this point, the abstractor assesses all of the information gathered to make sure there are no loose ends, and then organizes it all into standard abstract format for presentation.
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