The term that refers to a written agreement from a title insurance company to issue a policy to both the buyer and the lender is known as a title commitment. A title commitment outlines the terms and conditions under which the title insurance will be issued, detailing what title issues will be addressed and ensuring that the property in question has a clear title free from liens or claims that could affect the new ownership.
Title commitments are crucial as they provide both parties—buyers and lenders—with a level of assurance regarding the title’s condition before the transaction is finalized. The document typically contains preliminary findings of the title search and indicates the amount of coverage that will be provided, any exclusions or exceptions, and the requisite steps necessary to finalize the title insurance policy.
The other terms, such as insurance commitment, insurance warrant, and title warrant, do not accurately define this specific document or its role within real estate transactions, which primarily revolves around the securing of a title policy. Therefore, understanding the concept of a title commitment is key to navigating real estate transactions and ensuring proper title protection for all parties involved.