A title commitment is a document issued by a title company that outlines the conditions and terms under which it will issue a title insurance policy for a property. It serves as a promise to provide title insurance once certain requirements are met.
1. Identifies Ownership Issues
The title commitment reveals any defects or issues with the property’s title, such as liens, encumbrances, or disputes, that need to be resolved before closing.
2. Outlines Title Insurance Coverage
It details what the title insurance will cover, including protection against claims or disputes over property ownership that may arise after the sale.
3. Sets Conditions for Closing
The commitment specifies what must be done before the title insurance policy is issued, such as paying off existing liens or obtaining necessary documents.
4. Provides Peace of Mind
For both buyers and lenders, it ensures that the title is clear and that they will be protected against future claims, reducing the risk of legal issues after the purchase.
