What does a title commitment provide?

A title commitment serves as a preliminary agreement from a title insurance company that outlines the terms and conditions under which a title insurance policy will be issued. This document is critical in the real estate transaction process as it assures both the lender and the buyer that the title to the property is clear or identifies any issues that need to be resolved before the sale is finalized.

In addition to stating the terms for the insurance coverage, the title commitment also shares pertinent details regarding the property, such as the legal description and any existing liens or encumbrances. This gives all parties involved a clear understanding of what the title insurance will cover and what obligations they may have to fulfill before the policy is issued.

Understanding the specific functions of a title commitment is crucial in the real estate process, as it lays a foundation for secure property transactions and helps prevent future disputes over title issues.