When a person goes to purchasetitle insuranceRequirements and exceptions are made to provide the consumer with detailed knowledge of what is needed to qualify, or what will not be applicable under certain conditions. Title commitments basically serve the purpose of providing the consumer of what will be covered if conditions are met, and what will be excluded.
Some of the requirements stated in some title insurance commitments are:
proper deed transferring ownership evidence of the buyers new mortgage
payoff of the sellers current mortgage satisfaction of any liens A title insurance commitment can exclude any number of things for a variety of reasons. Some of the exceptions stated in title insurance commitments are:
any claims that exist but were not traceable when the title search was done
any easements that were in existence but not traceable when the search was done
any liens that might be in existence but were not traceable in the time of search
any restrictions shown in the public records
Reviewing commitments for title insurance is a very important process that can prevent headaches from occurring in the future. When a title insurance company provides an investor with coverage they take time to carefully review the property. Insurance companies thoroughly review the public records for all information available regarding the property of interest.
This can save an investor from having to pay back taxes due to a lien placed on the property before it was purchased. Knowing the history about the property of interest should be one of the primary concerns when an investor is inquiring about a home, land or business. This helps decrease the risk factor that is applied when previous owners leave their homes with “strings attached”.
For example, a previous owner having liens placed against their land or property for back taxes would shift the responsibility to the new owner, in regards to the payment on such liens. This shift is present, in order to avoid the risk of losing such an investment. Situations like this should be made aware and taken care of before any property is bought. Tax insurance commitments provide an efficient way of making this possible.