Title Searches, Title Reports and Title Commitments - How They Work Together
During a real estate closing at the Lake of the Ozarks, the title search, the title report, and the title commitment will all be handled by your title company. Each one of these plays a specific role in the process, but while each has a different purpose, they all work together. As your trusted title company at the Lake of the Ozarks since 1984, it is our mission to educate clients so they have all the information they need when making important decisions. That is why we wanted to talk about the purpose behind a title search, a title report and a title commitment. Read on to learn more!
A title search is a detailed examination of extensive public records to find all the available data about the specific parcel of property you are purchasing and all of its previous owners. The reason for the title search is to uncover any problems or potential issues with the property that would make it no longer worth buying for the price. The title search will help determine that there are no known liens or unpaid taxes, and that the seller has the legal right to sell the property. The title search will also reveal things like easements, restrictions, etc. associated with the property.
After the title search, a title report will be issued. The title report is just that, a report based on what was learned in the detailed research conducted during the title search. It will outline any encumbrances, information about liens or tax liabilities, easements as well as relevant restrictions, covenants, and other conditions. The title report only provides information, it does not confirm whether a title policy can be issued.
The purpose of a title commitment is to commit the title company to issue a title insurance policy when your real estate transaction closes. The title commitment will include any conditions and exceptions regarding the title insurance policy after taking into account information from the title report.
Conditions to the Title Commitment are basically pre-requisites to having the title insurance policy issued. Common conditions would be that the seller has to pay off all liens and the mortgage on the property at the time of closing, surveys must be updated, lawsuits must be resolved, etc. Whatever the conditions set out, they must be satisfied before the title insurance policy will be issued.
Exceptions to the Title Commitment are situations or items that the title insurance policy will NOT cover. They also outline ways that the property you are buying may have limitations on its use. Exceptions can be things like covenants, restrictions, easements or other things that can limit how useful the land is to you.
The information gained in your title search and contained in your title report and title commitment are critical to understanding exactly what you are purchasing and all that comes with it. If you would like to learn more about them, give us a call. As the best title company at the Lake ofthe Ozarks, we take the time to help you understand the elements of your real estate closing and work with integrity and transparency to bring you to and through your closing with confidence. For all your real estate settlement needs, you can trust Arrowhead Title … where accuracy really does matter!