query: examine title commitment

Good question. The title insurance commitment is really divided into three important parts.

The first identifies the proposed insured, the proposed policy amounts and the property being insured. If you want an owner policy, make sure they have you listed as a proposed insured and your name is just like you want it on the deed.

As for the property, you want to look at two things.

Check the current vesting. The title insurance commitment will tell you who the vested owner really is and when they took title. If the current owner recently acquired the property, you should ask how much they paid for it. It's public information so don't be shy. If you are paying $250,000 for a property that the current owner purchased two months ago for $100,000 wouldn't you like to know?

Check the legal description very carefully. Don't assume the title agent got the right property. Mistakes are made and this is your chance to review and approve the proposed conveyance. Make sure the legal description is right. If you do not have a survey, it may be hard to visualize but give it a shot. Look at street names, any information you can use to be sure they are insuring the correct parcel.

Now, go on to Schedule B1. This is the stuff the title agent must clear BEFORE they issue the title insurance for you. Most of it is boilerplate, but often you'll find real title problems outlined in this section. Review it carefully and if you have any questions, call your title insurance agent. If they give you any grief about answering your questions, fire them and find a new agent. This is their job. You are paying for their services and you deserve their time and attention.

Finally, carefully review Schedule B2. These are the exceptions to your coverage. You'll see some boilerplate items and some that are specific to your property. If you see restrictions, covenants, reversionary clauses, conditions, get the details. Basically, anything you see in the exceptions that you think might affect your use and enjoyment of the property, you need to consider NOW before you buy the property.

Here's an example. Let's say you have a recreational vehicle and you intend to park it on the property. Your title commitment shows an exception for restrictions and conditions as set forth in Deed Book 3500, page 456. Well, how will you feel if you find out later that one of those restrictions prohibits you from parking your RV on the premises? Take your time and ask questions. Do NOT be afraid. An honest title agent will appreciate the fact that you actually reviewed the title insurance commitment. We think we're doing important work and we sure like it when you do, too. ;)