Title Commitments given to the buyer prior to closing is not understood by most home buyers.  Let’s take a look at why it’s important.

The title policy is an insurance policy on the property title furnished to the buyer.  The title company does historical research on  title of the property in the transaction.  The commitment outlines what will be insured and what the exceptions are that will not be insured.

Title commitment should be done for any property transaction.  Without a title policy and no title search you do not know for sure if the property is actually owned by the seller and you can be subject to any outstanding liens.  There also can be easements and other unfavorable agreements you might be subject to.

Below is a short explanation of the Title Policy

  • Schedule A reflects all the information that identifies the specifics of the proposed transaction. This includes the effective date of the commitment, proposed amount of insurance, type of policy to be issued, the name of the proposed insured(s), the person(s) with whom title is currently vested, the estate or interest in land to be covered, and the legal description of the property to be insured.
  • Schedule B sets out the proposed exceptions from coverage. There are two types of exceptions – standard exceptions and special exceptions. Standard exceptions appear in every commitment. Special Exceptions appear in commitments on an individual basis, indicating specific matters that affect the particular property. If you have questions about any of the exceptions listed on Schedule B, please contact your Title Company.
  • Schedule C sets out the requirements that must be met in order for the title agent to issue the title policy. Otherwise, they will be placed on Schedule B as exceptions to coverage on the title policy. There are two types of requirements – standard requirements that appear on every commitment and any additional requirements specifically added by the title company in order to insure the transaction.
  • Schedule D discloses three categories of information to all of the parties involved in the transaction:
    • Disclosure of ownership and officers of the title insurance underwriter and agent.
    • Disclosure of the estimated title policy premium charges
    • Disclosure of any party receiving a portion of the premium for furnishing title evidence, examination, and/or closing of the transaction.