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 Mississippi, an abstract of title is a comprehensive document that outlines the history of a piece of real estate. This includes a record of past 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 done to provide assurance to a lender or potential buyer that the title is clear of any defects or 'clouds' that could affect their interests. It is a critical step in the due diligence process before the transfer of property. While a title report can also be used for the purchase of title insurance, it may not be as thorough as an abstract of title, which is specifically designed to reveal any potential issues with the property's title. In Mississippi, as in other states, the process of creating an abstract of title should be conducted by a skilled attorney or a title company to ensure accuracy and completeness.