A few days before a closing, buyers and lenders receive a title commitment. It is easy to skim, but it is the document that tells you whether the seller can deliver what you are paying for.
The three parts
- Schedule A identifies the property, the current owner of record, the proposed insured and the amount of coverage.
- Schedule B, Part I lists the requirements that must be met before the policy issues, such as releasing the seller's mortgage, recording the new deed or clearing a lien.
- Schedule B, Part II lists the exceptions: matters the policy will not cover, such as recorded easements, restrictions, and real estate taxes not yet due.
Problems a title search turns up
- Old mortgages that were paid off but never released of record
- Judgment liens, tax liens or mechanics' liens against the owner
- A prior owner's estate that was never probated, leaving a gap in the chain of title
- Legal descriptions that do not match the survey or the auditor's records
- Delinquent taxes or special assessments
Most of these can be fixed before closing if they are found early. Found late, they delay the closing or leave the buyer with someone else's problem.
Owner's policy or lender's policy?
If you finance the purchase, your lender will require a lender's policy. That policy protects the lender only. An owner's policy protects you, for as long as you or your heirs own the property, and it is paid for once at closing.
Safe Harbor Title Agency handles title examination and closings with an attorney reviewing the file. If you are buying, selling or refinancing in Butler County or the surrounding counties, call us before you sign the purchase contract and we will tell you what to look for.