Does a Homebuyer Have to Read a Title Commitment?
Answer: It is a good idea, but not very realistic.
Somewhere between your Earnest Money Contract and your closing, you will receive a Title Commitment. This document is provided to you from the title company to assure you that you have good title to the property and to let you know what encumbrances on the property might exist.
What is an encumbrance on the property? Simply stated, an encumbrance is something that affects your title and more importantly, your use and marketability of the property. A simple example of an encumbrance is an easement. In any subdivision, there will be easements granted to the city for water, sewer, etc. If needed, they have the legal right to work on your property where the easement exists and they really don't need your permission.
In an ordinary subdvision development, you are very unlikely to have any kind of abnormal or unusual encumbrance. When you start getting into bigger properties, rurual properties or properties not in some uniform pre-planned community, the likelihood of an encumbrance on your title increases greatly.
So reading your title commitment is a good idea, although most lawyers not involved in real estate would have a difficult time understanding it. For that reason, I highly recommend you ask your realtor if the title commitment has any unusual encumbrances or consult a real estate attorney.
Next time, I will discuss what to look for when you receive your title commitment.