Q: Why Is the Title Commitment Important?

By David Brough

From a young age, real estate captured David's interest, and that passion has remained throughout his life. Over the past 15 years as a Realtor.

Fellow real estate agents: How often do you read the title commitment, the document that is sent to you by the title company about two weeks after the offer is accepted? I ask because if you’re not reviewing it every single time, you should—doing so could save you and your clients a lot of problems.

The title commitment is just a guarantee stating that the title company will insure the property after closing if certain criteria are met. They’ll look to see if there are any liens, HOA fees, or judgments filed on the property.

Even right now, I have a transaction pending. The seller’s home was valued at $115,000 but there was $200,000 or $300,000 worth of tax judgments on it from a previous owner. Had we not caught this, we could have gone to closing, which would have made for a huge mess.

Most title companies will send the commitment without much warning, and it’s not their job to make sure that you, the agent, have all your facts straight. We’re the market experts, so the buck stops with us.

For our part, every time we receive one, we have a designated person on our team review it and let both parties know about any problems so that everyone is on the same page. Catching problems early on gives the seller time to go back and negotiate a lower payoff for the judgment. Sometimes the local attorney’s office will take a fraction off the adjusted amount.

If you put this into practice, then you can potentially save you and your clients a bunch of headaches.

If you have any questions about this or other real estate topics, don’t hesitate to reach out to us. We’d love to hear from you.