Title Commitment

Title Commitment

A title commitment is a document that is issued by a title company before a real estate transaction is finalized. It provides information about the property's title history, including any liens, encumbrances, or other defects. The title commitment also lists the requirements that must be met before the title company can issue a title insurance policy.

The title commitment is important for both the buyer and seller in a real estate transaction. The buyer uses the title commitment to assess the risks associated with the property and to negotiate with the seller to have any defects removed. The seller uses the title commitment to ensure that they are not selling the property with any undisclosed defects.

The title commitment is typically divided into several sections, including:

  • Property description: This section provides information about the property, such as the address, legal description, and parcel number.
  • Title history: This section lists all of the previous owners of the property, as well as any liens, encumbrances, or other defects that have been recorded against the property.
  • Requirements: This section lists the requirements that must be met before the title company can issue a title insurance policy. These requirements typically include things like paying off any outstanding liens, clearing any title defects, and obtaining a survey.
  • Exclusions: This section lists any defects that are not covered by the title insurance policy. These defects are typically things like zoning violations, environmental hazards, and encroachments.

The title commitment is a complex document, and it is important to have a real estate attorney review it before you sign it. The attorney can help you understand the risks associated with the property and negotiate with the seller to have any defects removed.

Here are some of the benefits of having a title commitment in a residential real estate transaction:

  • It protects the buyer from buying a property with undisclosed defects.
  • It helps to ensure that the buyer has clear title to the property.
  • It can help to reduce the risk of legal disputes.
  • It can help to speed up the closing process.

If you are buying or selling a home, it is important to understand the importance of a title commitment. A title commitment can help to protect you and ensure that your transaction goes smoothly.