An abstract of title—also known as a title examination, examination of title, title abstract, or title abstraction—is the legal history or chronology of a certain piece of real property. For example, an abstract of title includes a history of all the property’s owners, the period during which each owner held the title to the property, and all liens and encumbrances that affect title to the property.
An abstract of title is usually prepared for a mortgagee (bank or lender) or a purchaser of the property and is sometimes used to market the property to a potential buyer. An abstract of title is generally designed to identify and eliminate any clouds (claims) on the title. In contrast, a title report is merely used to facilitate the purchase of title insurance and is sometimes not as complete or reliable as an abstract of title.
In Iowa, an abstract of title is a critical document that provides a detailed history of the legal ownership and claims on a specific piece of real estate. It includes a chronological list of all previous owners, the duration of their ownership, and any liens or encumbrances that may affect the property's title. The preparation of an abstract of title is typically required for real estate transactions, such as when a property is being sold or mortgaged. The purpose of the abstract is to ensure that the title to the property is clear of any 'clouds' or potential legal issues that could affect the new owner's rights. It is a comprehensive document that is used to prove the seller's right to transfer ownership and to identify any issues that need to be resolved before the transaction can be completed. In Iowa, unlike some other states, the use of abstracts of title is still common practice, and they are often required by lenders before they will approve a mortgage. This is in contrast to a title report, which is typically less detailed and is used primarily for obtaining title insurance rather than for verifying the seller's clear title to the property.