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 Idaho, an abstract of title is a document that provides a detailed history of a particular piece of real estate, including a record of past ownership, the duration of each ownership, and any liens or encumbrances that may affect the property's title. This document is crucial for potential buyers or mortgagees to understand the legal status of the property and to ensure that there are no outstanding claims or issues that could affect their rights to the property. The preparation of an abstract of title is typically done by an attorney or a title company, and it is a key step in the due diligence process before the finalization of a real estate transaction. The abstract aims to clear any 'clouds' or potential claims on the title, providing a clear path for the transfer of ownership. While a title report is also used in the process of acquiring title insurance, it may not be as comprehensive as an abstract of title, which is why the latter is often preferred for a thorough examination of the property's legal background.