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Understanding the Title Insurance Commitment or Binder

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During the real estate purchase process, the title company will search the public records, and issue what is called a title insurance commitment or a title insurance binder. Along with certain property, buyer, and lender information, this document will likely have a list of requirements and exceptions. This document binds the title company to issue the insurance policy subject to the requirements being met. The list of exceptions are those items that will not be covered by the insurance policy.

The list of requirements on this title insurance commitment might include:

  • payoff of the seller's current mortgage
  • evidence of the buyer's new mortgage
  • payment of all outstanding taxes and assessments against the property
  • a proper deed transferring ownership
  • a new survey or improvement location report
  • satisfaction of any liens against the property
  • The list of exceptions to the title binder might include:

  • any claims that exist but were not in the records to be found when the title search was done
  • any easements that were in existence but not shown in the public records when the search was done
  • any liens that might be in existence but were not shown in the public records at the time of the search
  • restrictions or covenants as shown in the public records
  • The purpose of the title insurance commitment or title insurance binder, as it's sometimes called, is to indicate to the buyer that they will get title insurance issued if the requirements are met, and to list items not included in the coverage.

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