Why Do We Need A Title Commitment

This week the Harrison Group sits down with Lathram Pou from Lawyers Title . Our biggest question for our guest this week is ” Why Do We Need A Title Commitment ” ? Tune in to learn more .

 

MaryBeth H.: Hi. This is MaryBeth Harrison with Dallas Native Voice, and I’m sitting here with my friend Lathram Pou with Lawyers Title. I have some questions about this.
Lathram Pou: All right.
MaryBeth H.: Just title a loan. In our contracts, it talks about title, that we’ll be giving a title commitment. Why? Why do we need a title commitment? What is it? What’s it cover? What’s …
Lathram Pou: That’s a great question, and it’s a question that a lot of people have. When we receive a contract we do a search on the property and we do a search on the seller, and we put into a title commitment the things that are affecting that property or that seller that the buyer and/or their lender might be interested to know. It also gives us the items that we know that we need to clear so that we can close this transaction.
MaryBeth H.: Give me an example. What might be something that would show up for the seller? What might we see there?
Lathram Pou: For the seller, their purchase money deed of trust will show up, so we know we need to get a payoff from the seller.
MaryBeth H.: Okay.
Lathram Pou: It might also state that we need to clarify the seller is married or not.
MaryBeth H.: Okay.
Lathram Pou: If this property is a homestead, and possibly if it’s affected by an HOA.
MaryBeth H.: Okay. What might make the house itself or the property itself have something negative to it on the title commitment? What are you looking for there?
Lathram Pou: We also review the survey typically and we can help define if there’s any encroachments from a fence or from a neighbor’s concrete driveway, et cetera, and/or at the same time, we can just tell them that their alley easement comes so far into their property that they might reconsider where they put a pool.
MaryBeth H.: Okay. Anything else would be if there were liens against the property or-
Lathram Pou: Yeah. [crosstalk 00:01:56] Any kind of financial burden, those liens that you’re referencing. Any kind of financial burden, it is required that the seller handle those, but it’s actually us who facilitates the payoff of their liens.
MaryBeth H.: Okay, so pay off their existing loan, pay off any liens that might be on the property so that when a buyer buys the house they know that they’ve got as clean, a clear a path as they can possibly have. Right?
Lathram Pou: That is true.
MaryBeth H.: What happens when something does rear its ugly head that maybe wasn’t found during the title search because it happened between the time you did that and closing, for example? What happens? How does that work? Or our neighbor comes and knocks at the door and says, “This is really ours.”
Lathram Pou: Right. As I said, we would issue a title commitment, where we’ve outlined the things that affect the property and then at the time to closing we will issue a title policy. That is your title insurance policy that benefits the owner, as well as their lender, if there is one, and then if something were to come up later they have this insurance policy to depend on. It ends up protector and/or their lender from any financial claims if something was missed.
MaryBeth H.: So they would come back to you, the title company, to solve that problem?
Lathram Pou: That is correct. We would then help facilitate an insurance claim against the title lender writer.
MaryBeth H.: Got it.
Lathram Pou: Happy to do so.
MaryBeth H.: All right. Well, that helps a lot. I think that clears up on the buyers of what they’re getting, and why they’re getting it, and why it’s even in our contracts.
Lathram Pou: Right.
MaryBeth H.: Thanks for listening, and you can find us at dallasnative.com and learn more about this, as well as on all of the social medias. Thanks for listening.

 

 

Information Courtesy of Dallas Nativeย 

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