How to Read a Title Insurance Commitment (Preliminary Title Report)

See the full blog post at: http://retipster.com/title-commitment

Table of Contents:
0:36 - What is a title insurance commitment?
2:40 - Overview Schedule A
3:14 - The difference between an Owner’s Policy and a Lender’s Policy
4:27 - Who pays for title insurance, the buyer or the seller?
6:58 - Overview of Schedule B - Section I Requirements
19:05 - Overview of Schedule B - Section II Exceptions

When I was getting started in the land business, most of the properties I bought were VERY cheap, because I didn't have much money to invest, and the lower-end properties were all I could afford. As a result, I spent a lot of time closing my own deals and doing my own title work.

I won't lie - doing all this legwork yourself requires A LOT of extra time, effort, and energy. It also opens the door for you to make mistakes. If this is something you're planning to do, it's important to go slow and take your time to understand what you're doing. It's a process where accuracy is VERY important.

If you're approaching this with no prior experience closing real estate transactions (a category I suspect most people fall into), it's not a bad idea to get some help from an experienced title professional or closing attorney on your first couple of deals just to make sure you're doing it right.

Even if you have to pay out a huge chunk out of your profit on your first deal, it's still a bargain IF you pay close attention to what they're doing and ask a lot of questions to make sure you're learning the process. Once you understand how to close a simple transaction yourself, you can save yourself a lot of money on your future deals. I've easily saved myself tens of thousands by doing it this way... but it was only possible because I took plenty of time to understand the process before I jumped into it myself.

If you're closing this kind of deal yourself, the title company is going to give you a "title report" (aka - Title Commitment or Preliminary Title Report), which can be a fairly complicated and confusing document with A LOT of information baked into it. The first time I tried to close a deal WITH title insurance, but WITHOUT the help of a title company to facilitate the closing, I was wildly confused about what I was looking at. It took me a long time (and several conversations with the title company) to figure out what I actually needed to do with this document.

In an effort to help you understand how to decipher what's written in a title commitment, I've put together the video above.

Essentially, you need to look at the full laundry list of items on Schedule B, Section I, make sure every item is complete, and then deliver them to the title company. Once they have your full package, they will take the information and get your title insurance policy processed and finalized.

Keep in mind - you won't have any effective title insurance protection UNTIL all of these steps are complete and you've paid your title insurance premium.

Видео How to Read a Title Insurance Commitment (Preliminary Title Report) канала REtipster