What Is Title Commitment?
Title Commitment: The title company's report of what it will insure, what must be fixed first, and what's excluded.
Also called: preliminary title report, title binder
A title commitment, or preliminary title report, is issued after the title search. It's the title company's promise to issue a title insurance policy once certain requirements are met.
Main sections
- Schedule A: the property, the current owner, the proposed insured parties and the policy amounts
- Schedule B-I (requirements): what must happen before closing, such as paying off the seller's mortgage or releasing a lien
- Schedule B-II (exceptions): items the policy won't cover, such as recorded easements, covenants and HOA restrictions
What to look for
Read the exceptions. An easement or restriction could affect a fence, pool, addition or rental plans. Ask the title company to explain anything unclear before your title objection deadline, if your contract has one.