What is the purpose of a title commitment report?

A title commitment report serves a crucial role in real estate transactions by identifying potential encumbrances on the title. This report is issued by a title company before closing on a property and outlines any claims, liens, or restrictions that may affect ownership. By highlighting these encumbrances, such as mortgages, easements, or other legal claims, the title commitment enables buyers, lenders, and other stakeholders to understand any risks associated with the property before the transaction is finalized. This information is vital for ensuring that the buyer can make informed decisions and take necessary actions to mitigate any potential issues prior to transfer of ownership.

Understanding the potential encumbrances is essential as they can affect the value and usability of the property. The commitment will provide details regarding the steps needed to address these encumbrances, ensuring a clearer path to ownership without unexpected legal hurdles.