What Happens During the Title Examination in an Arizona Home Purchase?

During a title examination in Arizona, a title company reviews public records to confirm the seller legally owns the property and to uncover any liens, easements, judgments, or other claims that could affect your ownership. You receive a preliminary title report listing these findings, and you typically have five business days to object to items you want resolved before closing. The exam protects you from inheriting someone else's debts or legal problems.

Here is what happens at each step and what you need to watch for as a buyer in the Phoenix Metro area.

The Title Examiner Reviews the Chain of Title

The examiner searches Maricopa or Pinal County Recorder records to trace every transfer of ownership back 30 to 50 years. This confirms the seller holds clear, marketable title. The examiner looks for gaps, forged signatures, or transfers that were never properly recorded. Any break in the chain must be cured before closing.

In Arizona, most title companies rely on a title plant, a private index of recorded documents that speeds up the search. The examiner still verifies findings against the county recorder's database to catch recent filings.

Liens and Encumbrances Are Identified

The examiner flags every recorded claim against the property. Common findings include:

• Mortgages and deeds of trust: The seller's existing loan must be paid off at closing.
• Mechanic's liens: Unpaid contractors or suppliers can record a lien. Arizona law gives them up to 120 days after work is completed to file.
• Tax liens: Federal, state, or county tax debts attach to the property. The IRS has a 120-day redemption right even after a foreclosure sale.
• Judgments: Court-ordered debts against the seller become liens on all real property they own in the county.
• HOA liens: Unpaid homeowner association dues and assessments are senior to most mortgages in Arizona under A.R.S. 33-1807.
• Easements: Utility, access, or drainage rights that run with the land. These usually remain after closing.

The preliminary title report lists each item as an exception to coverage. Liens must be satisfied or subordinated. Easements and CC&Rs typically transfer to you as the new owner.

You Receive the Preliminary Title Report

Within a few days of opening escrow, the title company delivers a preliminary title report, often called a prelim or commitment. This is not a final policy. It shows the current state of title and which exceptions will remain when the company issues your owner's policy at closing.

Review Schedule B Section II carefully. It lists every lien, easement, encumbrance, and restriction. Schedule A identifies the seller and legal description. Schedule C estimates the policy amount, which equals your purchase price.

Your purchase contract sets your objection deadline. The Arizona Association of Realtors residential contract gives you five business days after receipt of the prelim to object in writing to any title exception. Miss this deadline and you waive your right to demand the seller cure defects, except for new liens recorded after the report date.

The Seller Cures Title Defects

Once you object, the seller has a contractual duty to cure items that prevent marketable title. The most common cures include:

• Paying off loans and liens: The escrow officer coordinates payoffs so liens are released at closing. The title company verifies release documents before recording your deed.
• Obtaining lien releases: For old, satisfied debts that were never formally released, the seller or their attorney must track down the creditor and record a release.
• Correcting errors: Misspelled names, wrong legal descriptions, or duplicate recordings require a corrective document signed by the original parties.
• Quiet title actions: If an heir, ex-spouse, or other claimant has a potential interest, the seller may need to file a lawsuit to clear the cloud. This can delay closing by months.

If the seller cannot or will not cure a material defect by the closing date, you can cancel the contract and receive your earnest money back, or you can accept title subject to the defect and negotiate a price reduction or credit.

The Title Company Issues the Final Commitment

After all cures are completed and verified, the title company issues an updated commitment reflecting clear title. This document binds the insurer to issue an owner's policy at closing, subject to standard exceptions such as:

• Rights of parties in possession not shown by public records.
• Easements or claims not shown by public records.
• Any lien or encumbrance created, suffered, or agreed to by you.
• Unrecorded mechanic's liens for work completed within the past 120 days.

You can purchase extended coverage, called an ALTA Homeowner's Policy, to insure against some of these standard exceptions. The cost is modest, usually $50 to $150 more than a standard policy.

Title Insurance Is Issued at Closing

In Maricopa County, the seller pays for your owner's title insurance policy, which protects you for as long as you or your heirs own the property. The premium is a one-time charge based on the purchase price, typically around 0.35 percent. If you are financing, you also pay for a separate lender's policy, which protects only your lender and terminates when the loan is paid off.

Arizona has no state transfer tax, so title and escrow fees are among the lowest in the country. Your Closing Disclosure will show the exact premium and related fees three business days before closing.

Example: Title Exam Uncovers an Old Judgment Lien

You are buying a home in Chandler for $475,000. The preliminary title report arrives and lists a $12,000 judgment lien recorded in 2019 against the seller. You object within five days. The seller's attorney contacts the creditor and negotiates a settlement for $8,500, paid at closing from the seller's proceeds. The title company obtains a signed release and records it the same day your deed records. Your owner's policy insures you free of that lien. Total title premium: approximately $1,660, paid by the seller.

People Also Ask

How long does a title examination take in Arizona?

Most title companies complete the exam and deliver a preliminary report within three to five business days of opening escrow. Complex properties with multiple past owners, foreclosures, or out-of-state liens can take longer. Rural parcels in Pinal County may add a day or two due to fewer title-plant resources.

Can I choose my own title company in Arizona?

Yes. Arizona law does not require you to use a particular title company, although the purchase contract typically designates one. You can negotiate to use a different company if you prefer, especially if you are paying for part of the title insurance. Your lender may require the title company to be on their approved list.

What happens if the title exam finds an easement I don't like?

Easements recorded before your contract are usually considered acceptable encumbrances and transfer with the property. You can object within your contract deadline and ask the seller to remove or relocate the easement, but the seller is not required to do so unless it materially impairs the property's use. If you cannot reach an agreement, you may cancel the contract or proceed with the easement in place.

Bottom Line

The title examination is your safety net. It uncovers hidden claims before you take ownership and gives you time to demand fixes or walk away. In Arizona, you have a short window to object, so review the preliminary report as soon as you receive it and consult your agent or real estate attorney on any item that concerns you. If you are buying in the Phoenix Metro and want an agent who knows how to read a prelim and protect your interests during escrow, reach out to discuss your needs and budget.

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