How do you review the title commitment before closing?

1 Check the basic information

The first section of the title commitment contains the basic information about the property, the parties involved, the title company, and the effective date. You should verify that all the details are correct and match the purchase contract and the loan documents. If you notice any errors or discrepancies, such as spelling mistakes, wrong addresses, or missing names, you should contact the title company and request a correction as soon as possible.

2 Review the requirements

The second section of the title commitment lists the requirements that must be met before the title company will issue the title insurance policy. These may include paying off any existing liens, taxes, or judgments against the property, obtaining a release of any easements or encumbrances, or providing proof of identity and marital status. You should review the requirements carefully and make sure you can comply with them before closing. If you have any questions or concerns, you should discuss them with your real estate agent, attorney, or lender.

3 Understand the exceptions

The third section of the title commitment outlines the exceptions that the title company will not cover in the title insurance policy. These are the items that affect the property title but are not cleared by the title company. They may include covenants, restrictions, reservations, easements, or other matters of record that limit your use or enjoyment of the property. You should understand the exceptions and how they impact your ownership rights and obligations. If you find any exceptions that are unacceptable or unclear, you should negotiate with the seller or the title company to remove or modify them.

4 Compare the coverages

The fourth section of the title commitment describes the coverages that the title company will provide in the title insurance policy. There are two types of title insurance policies: owner's and lender's. The owner's policy protects your interest in the property from any defects or claims that may arise after closing. The lender's policy protects the lender's interest in the property from any liens or encumbrances that may affect their security interest. You should compare the coverages and premiums of both policies and decide which one suits your needs and budget.

5 Ask for a copy

The fifth section of the title commitment is usually a blank page that indicates that the title commitment is not a final or binding document. It is subject to change based on the findings of the title company or the instructions of the parties. You should ask for a copy of the final title commitment and the title insurance policy before closing and review them again for any changes or updates. You should also keep a copy of both documents for your records and future reference.

6 Consult a professional

The sixth section of the title commitment is not a part of the document but a recommendation for you. Reviewing the title commitment before closing is a complex and important task that requires attention to detail and legal knowledge. If you are not familiar with the terms and conditions of the title commitment or the title insurance policy, you should consult a professional, such as a real estate attorney, a title agent, or a closing agent. They can help you understand the implications of the title commitment and advise you on how to protect your rights and interests.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?