What Is A Title Commitment?

What is a Title Commitment? Why is it important?

A Title Commitment is the precursor of your Title Insurance Policy which is your safety net in a real estate transaction that you are protecting against title issues prior to your purchase of the property.

The Title Commitment is the insurance company’s commitment to provide you with an insurance policy covering the real estate parcel you are purchasing.

The Title Commitment comes with four main parts called “Schedules”. Each schedule is important for you as the buyer.

“Schedule A” shows who owns the real estate parcel being purchased. If you are buying land from Bill who is signing all the contracts, but Mary shows up in Schedule A you may have a problem.

“Schedule B” will reveal all the items that come with or affect the property being purchased. These items include easements, liens, recorded leases and other items that you need to be fully aware of. The Title Insurance Policy will NOT cover Schedule B items if they become troublesome in the future.

“Schedule C” is the pathway to closing for your chosen title company. Schedule C reveals all items that must be done or “cured” prior to the insurance policy being issued. These items will include liens being satisfied and released, taxes paid to date of closing, licensed surveys being submitted and so on. Your agent and title company should help the process along on these items to assure you a successful transaction.

“Schedule D” reveals the cost of the Title Insurance Policy. Depending on how your transaction was negotiated this may be a cost to the seller, the buyer or split between the parties.

It is our experience that most buyers never look at and fewer understand the importance of reviewing the Title Commitment. Sadly, many agents leave the contents of the Title Commitment to the Title Company without fully comprehending it’s contents.

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