The title commitment is one of the most important documents in a real estate transaction. However, most buyers have no idea what the title commitment means or what title insurance covers. The title commitment is a document issued by the closing attorney or title company that will be issuing title insurance to the after closing. The title commitment gives a detailed account of the ownership of, and liabilities associated with, that property, and it explains precisely what the title insurance policy will and will not cover, once it’s issued. Having your title commitment reviewed by an experienced real estate lawyer protects your interests and investment by making sure no surprises are lurking in the text of your title commitment.

Overview Of The Title Commitment

In addition to spelling out the requirements necessary to provide title insurance, the title commitment provides a detailed listed of any liens, obligations, or other burdens that may be attached to the title for the property, and limitations on the use of the property, like easements; existing leases; CC&Rs (covenants, conditions & restrictions, such as the rules of a homeowners’ association). The title commitment document addresses all of this information in three sections, called Schedules.

  • Schedule A – Schedule A contains basic information about the real property and transaction: The purchaser and mortgage lender, legal description of the property, the effective date of proposed title insurance policy, along with the type of policy, coverage amounts and current title vesting (ownership).
  • Schedule B-I – Schedule B-I lists all of the requirements that need to be met before the property title is considered marketable, and the insurance policy can be issued to the buyer (proposed insured). This might include things like the deed from seller to buyer, mortgage documentation between buyer and lender, satisfaction or release of any liens, corrective deeds from prior owners, or probate for a deceased owner.
  • Schedule B-II – Schedule B-II specifies items that the title insurance policy will not cover: The exceptions. There are standard exceptions for issues like unrecorded easements, encroachment, rights of tenants who occupy the property, and municipal liens. There may also be property-specific exceptions for things like CC&Rs, recorded easements, or agreements with utilities.

Real Estate Lawyers Help You Deal With Those Requirements and Exceptions 

An experienced real estate lawyer can help ensure you are aware of any issues in your title commitment that may delay closing and receive a title policy that best protects your interests.

Often they can also help you exercise your rights under the sales contract to require the Seller to resolve the title issues or have some of the listed exceptions covered by the title insurance policy. The real estate lawyers at Overstreet, Miles, Cumbie & Finkenbinder help buyers and sellers in Kissimmee, St. Cloud, and throughout Osceola County make fully informed choices for successful transactions. Give us a call at 407-847-5151 or contact us online to schedule a consultation and we’ll let you know how we can help you get what to expect from your real estate transaction, without unwelcome surprises.

“What are my closing costs” is one of the most common questions when buying and selling real estate. While the sale contract breaks down the list of closing costs, fees, and charges for each party, it remains of the most mysterious sections of the contract. That’s because the elusive “closing costs” vary based on the sales price of the property, the type of loan you choose, and the state or county where the property is located.

Typical Closing Costs For Sellers:

  • Applicable Documentary Stamp Taxes
  • Owner’s Title Policy and Charges (depending upon contract terms)
  • Municipal Lien Search
  • HOA/Condo Estoppel Fees
  • Recording and any other fees required to provide marketable title
  • Seller’s Attorney Fees

Typical Closing Costs For Buyers:

  • Documentary Stamp & Fees On Promissory Notes
  • Recording Fees For Deed & Financing Statements
  • Owner’s Title Policy and Charges (depending upon contract terms)
  • Property Survey, if Required
  • HOA/Condo Association Transfer/Application Fees
  • Municipal Lien Search
  • Loan Costs like origination, appraisal, inspection, and credit reporting fees
  • Buyer’s Attorney Fees

Why Are Some Fees Listed Twice?

In some cases, the fees are negotiable, either in terms of who pays them, or in terms of the amount to be paid. In general, sellers pay all the fees required to remove any encumbrances on the title and their own legal costs, while buyers pay the fees associated with financing and transferring the property title. The party paying for the title insurance chooses the closing/title agent, which gives some measure of control over that cost. However, many of the fees are regulated by state law, such as title insurance premium, documentary stamp taxes, and recording costs, will not change.

Having a real estate attorney on your side can help you negotiate a more favorable result and gives you added protection against surprises, like finding a previously undetected encumbrance on the property or learning after the transaction is over that there are zoning or land use controls that prevent you from using the property the way you wanted to.

Keep Closing Costs To Your Fair Share

When you work with the real estate attorneys at Overstreet Law, P.A., you place yourself in a better position to negotiate your fair share of closing costs and can rest assured that your real estate purchase contract is not going to come back to bite you later. Call or contact us online to schedule a consultation, and we’ll let you know how we can help in your specific transaction.

Deciding to buy a home is the largest investment most people make in their lifetime. Unfortunately, many homebuyers do not understand the terms of the paperwork they sign in the process. If homebuyers aren’t savvy, they can end up among those facing legal disputes over home purchases. Here are 3 ways to protect yourself from common pitfalls:

  1. Don’t Take Your Purchase Offer Lightly.

When you submit an offer on a home, you are agreeing to enter into a legally binding contract (if the seller accepts). While there may be contingencies that allow you to terminate the contract, once signed, it can be difficult and expensive to get out of.

A real estate agent can help you fill out a standard offer contract. It is wise to also have a qualified real estate attorney review the offer before it is submitted. A real estate attorney can advise you on your legal rights and obligations under the purchase offer and help you change the terms to best protect you.

  1. Take Advantage Of The Inspection Period.

This is one of the most important steps in the transaction. The Inspection period begins as soon as the seller accepts your offer, allowing you a set number of days to complete the inspection and determine whether you will move forward with the home purchase. While a seller must legally disclose any “known defects” to a buyer, in Florida it is the homebuyer’s responsibility to have the home inspected to discover any issues that may be present in the home.

Hire a qualified home inspector. A home inspection may reveal defects that change your decision to purchase the home and save you from costly repairs.

  1. Don’t Forego Title Insurance.

As part of the real estate transaction, a title agent or real estate attorney will complete a title search to review the “title” to the property that is being purchased. They will ensure that the property is free from encumbrances, liens and defects. The title agent or real estate attorney will then issue a title insurance policy insuring that it will compensate the insured if a defect, lien or encumbrance is uncovered later. Common title issues include unknown liens, deed fraud and boundary disputes. Don’t leave your property at risk, purchase title insurance.

Jennifer R. Bondy
Overstreet Law, P.A.

Title insurance is a specialized insurance policy that protects buyers and lenders against claims that may arise over the title of a piece of property. The policy is a one-time purchase that remains in effect for the duration of ownership, so if, for example, your children inherit your home, the title insurance coverage would continue to insure the property.

Why Would There Be Claims Against The Title Of My Property?

When you purchase real estate, part of the process is detailed research into the public records pertaining to that property. That search should reveal any type of encumbrance on the property including:

  • Tax or contractor’s liens
  • Claims of ownership by heirs
  • Ex-spouses
  • Creditors of previous owners
  • Easements that restrict your ability to build on a portion of the property

In certain cases, these encumbrances may not be discovered through the research process at the time of purchase, and those surprises called hidden risks, are precisely what title insurance protects against. Your owner’s title insurance policy obligates the title company who issued it to defend your title at their cost and to compensate you for any lost value of the property that arises from such a claim.

Am I Required To Have Title Insurance?

While there is no real estate law requiring you to carry title insurance, most mortgage lenders will require that the property be covered by both a lender’s title insurance policy, and an owner’s policy may be offered by the seller as part of your real estate contract. If you’re purchasing real estate with cash, you are not required to buy title insurance, its sound business practice to protect yourself and your investment by buying a policy or requesting the seller pay the cost of the policy.

Who Pays For The Title Insurance Policies?

Ultimately, the party responsible for buying the title insurance policy is determined by the sales contract. There are different customs that vary by county, for example, in Sarasota, Collier, Broward, and Miami-Dade counties, the seller typically pays for the title search, while the buyer pays for the owner’s policy, while in Palm Beach County, the seller usually pays for both.

It’s also important to note that the party paying for the policy selects the title agent, and you may wish to use a real estate attorney to serve as the title agent.

The real estate lawyers at the Kissimmee Law Firm of Overstreet Law, P.A. can help you understand the title insurance process and walk you through the specifics of negotiating a fair sales contract. Call us at 407-847-5151 for a confidential consultation.