WTH IS A TITLE COMMITMENT?

When you’re buying or selling a home, after you go under contract and the Title Company (in Montana) receives the buyer and seller information, they will send out what’s called a “Title Commitment” to both sides. This is for Title Insurance to make sure the Title of the home is free and clear and ready to be transferred from one owner to the next. Let’s talk about what this includes and why it’s important.

First, there are a few parts of the Commitment. The first is often called “Schedule A” and it identifies the buyers and sellers, the property including legal description, and the price that has been agreed upon. This information is important because it makes sure that this specific Title Commitment cannot be confused with any other.

Next, “Schedule B-1” is the requirements section, and lists everything that needs be done in order to issue a new coverage policy. This might be liens or other owners not on the Buy Sell that need to be cleared up.

Finally, “Schedule B-2” lists the exceptions from coverage. These are often CCRs (Covenants, Conditions and Restrictions) and Water Rights that the Title Insurance doesn’t cover.

As every Title Commitment is specific to the individual transaction, they also vary from one to the next. However, I hope this helps you understand yours and as always: the more you know the better off you’ll be.