What is a title commitment?
A title commitment is based upon a search of the public records. A preliminary title report issued by the Title Insurance Company tells a buyer several things about the property. It tells them what liens are on the property such as the seller’s current loan(s), state or IRS tax liens, or back property taxes. The prelim also notifies a buyer about any easements on the property. An easement is basically a right for someone else to use a portion of your land. (for example, utility easements give the right to the Telephone Company to have telephone poles in your yard or cable companies to run cable under your property. The prelim will disclose those liens, defects or encumbrances that will be exceptions to coverage on the policy unless removed. Such a search will allow the purchaser to understand the manner in which the title company is willing to insure the condition of title and to insist upon the seller providing clear title to the property before exchanging the sales’ proceeds for the
When these searches have been completed, the title company issues a commitment to insure, stating the conditions under which it will insure the title. The buyer and seller and the mortgage lender can proceed with the closing of the transaction after clearing up any defects in the title which may have been uncovered by the search and examination.
Related Questions
- My title commitment shows that through subordinate liens, the State of Florida or the United States of America must be served. How do I do accomplish that?
- Where should the settlement agent list the commitment fee, wire fee and other miscellaneous title fees on the HUD-1?
- What is a title commitment and how does it relate to title insurance?
