An abstract is a compilation of all instruments of record in the County Clerk's and Court Clerk's offices, which materially affect a specific tract of land. The instruments are typically arranged in chronological order beginning with the original allotment deed and showing all subsequent recordings, including, but not limited to deeds, mortgages, liens, judgments, bankruptcies, divorces and unpaid taxes.

An abstract is valid for examination by an attorney only if it has been updated by a licensed, bonded abstract company (per State Statute 74 Section 227.10 et seq.). A valid abstract must also have an unbroken seal affixed to it. Every valid abstract will have a tax report showing ad valorem taxes, personal taxes and special assessments, if any. Each time the abstract is updated, a new certificate page will be added, which shows a brief legal description, names of parties checked and the time period of the current certification.

Steps Involved in Updating an Abstract.

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It is the application of the principles of insurance to risks/hazards that exist in every real estate transaction.

Title insurance protects the insured from future losses arising out of events that happened in the past.

Yes. There are three types of title policies. The first one is the owner's policy, which the buyer would need for his or her protection. The second one is the lender's policy (mortgagee's policy), which only protects the lender. A majority of the lending institutions require a lender's policy for each real estate loan. The third type of policy is the leasehold policy. This type of policy is typically used by commercial or industrial entities that lease property on a long-term basis.

There are four steps necessary to get to the point of issuing a title policy (whether owner's, lender's or leasehold). The four steps are as follows:
1. Initial abstracting to update abstract for title examination;
2. Title examination by an attorney to produce a title commitment;
3. Final abstracting to show recorded documents (from closing) in abstract;
4. Collection of title insurance premium.


Each of the first three above-referenced steps has a fee associated with it, and the party who pays for each of these is determined by the real estate contract.

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