The ABCs of Title
What's in a Title Commitment?
The title commitment for title insurance informs those to be insured by a title policy of the condition of the property involved. In addition, it informs the future insurers of any requirements that must be met before a policy will be issued. In most insurances, the seller required by the contract to furnish the commitment to the purchaser. If a loan is part of the transaction, the lender will require a commitment at some time during the process of the loan.
There are four schedules to the title commitment
Schedule A
Actual Facts
- Sets the effective date of commitment
- Names the insured, sales price, loan amount, estate, or interest in the land
- States the names of the person(s) in the title
- Legal description
Schedule B
Buyer Be Aware
- Informs the insured of all recorded property restrictions, liens, mineral reservations, easements, and all other appurtenances
- Guarantees that ad valorem taxes are paid and current
- Limits liability of issued policy
Schedule C
Clear To Close
- Informs the insured of requirements before policy issue
Schedule D
Disclose
- Discloses all officers of the title company (according to state rules and regulations)
- Discloses policy(ies) of premiums
- Discloses beneficiary(ies) of premiums
Who Pays What?
A Guide to Closing Costs
Seller
Items for which the seller can generally be expected to pay
- Real estate commission
- Tax certificate
- Escrow fee
- Document preparation for deed
- Loan fees required by buyer’s deed
- Payoff of All loans in Seller’s name
- Interest accrued to lender being paid off, statement fees, and any prepayment penalties
- Owner title insurance
- Termite inspection (according to contract)
- Termite work (according to contract)
- Judgements, tax liens, etc. (against the seller)
- Tax pro-rations (for time owned during tax year)
- Homeowner’s dues
- Notary fees
- Home warranty
- (Additional fees agreed to per contract)
Buyer
Items for which the buyer can generally be expected to pay
- Lender’s title insurance premium
- Escrow fee
- Document preparation (if applicable)
- Notary Fees
- Recorded charges to all documents in the buyer’s name
- Termite inspection (according to contract)
- Homeowner’s association dues (for prorated portion of the year)
- Homeowners transfer fee
- All new loan charges (except those required by lender for seller to pay)
- Interest on new loan
- Inspection fees (roofing, property inspection, geological)
- Homeowner’s insurance premium for first year