Understanding Your Title Commitment, Title Insurance & Tax Certificate

Whether you’re buying or selling a home, you’ll encounter several important documents that help ensure a smooth and secure closing—especially the Title Commitment, Tax Certificate, and Title Insurance policy. These items work together to protect both sides, prevent surprises, and provide clarity about the home’s history and legal status.

To help you feel confident and informed, here’s a simple breakdown of what each document is, what it includes, and why it matters.

What Is a Title Commitment?

A Title Commitment is the title company’s promise to issue title insurance once certain requirements are met. It outlines:

• What is covered by the title insurance
• What must be completed before closing
• What will not be covered
• What stays attached to the property after transfer

This document gives buyers a clear picture of what they’re actually purchasing and helps sellers understand what issues need resolving before closing.

• The Main Parts of a Title Commitment
  • Schedule A – The Basics
    • Shows the key details: property address, legal description, buyer and seller names, lender, and purchase price.
  • Schedule B-1 – Requirements Before Closing
    • Lists items that must be addressed before the title can be cleared—such as mortgage payoffs, releasing old liens, or providing missing documentation.
    • Buyers: Ensures clean ownership.
    • Sellers: Outlines what you need to complete.
  • Schedule B-2 – Exceptions
    • Lists items that will remain with the property after closing and are not covered by title insurance, such as easements, HOA rules, covenants, or mineral rights owned by others.
  • Schedule C (if included)
    • Any notes or conditions that need clarification or further action.
• Why It Matters for Buyers and Sellers
  • Buyers: Ensures you’re purchasing a home with clear ownership and no hidden title issues.
  • Sellers: Helps you understand what must be resolved to deliver a marketable title and avoid delays.

What Is a Tax Certificate?

A Tax Certificate is issued by the county or local tax authority. It shows the property’s tax status and whether any taxes or assessments are owed.

• What’s Included
  • Current Year Taxes: Amount due for the year
  • Payment Status: Paid, unpaid, delinquent, or prorated for closing
  • Liens or Delinquencies: Any unpaid taxes or special assessments
  • Tax ID & Legal Description: Confirms the property’s official parcel information
• Why It Matters for Both Sides
  • Buyers: Ensures you don’t inherit unpaid taxes or surprise liens after closing.
  • Sellers: Confirms what taxes must be paid or prorated so closing statements are accurate.

What Is Title Insurance?

Title Insurance protects buyers and lenders from financial loss caused by problems with the property’s title—issues that may not appear in public records or might be discovered later.

• What Title Insurance Covers
  • Unknown liens or debts from previous owners
  • Errors in public records
  • Fraud or forgery in past documents
  • Missing heirs or ownership disputes
  • Incorrect legal descriptions
  • Undisclosed easements or restrictions
  • Unlike most insurance policies, title insurance is a one-time fee paid at closing—no monthly premiums.
• Types of Title Insurance
  • Owner’s Policy: Protects the buyer for as long as they own the home.
  • Lender’s Policy: Required by most lenders to protect their interest in the property.
• Why Title Insurance Matters
  • For Buyers: Gives peace of mind that your ownership is secure and protected against unexpected claims.
  • For Sellers: Helps prevent delays by ensuring a clear title is delivered to the buyer.

Title insurance acts as a safety net, ensuring that legal issues from the past don’t become financial problems in the future.

Conclusion

Title Commitments, Title Insurance and Tax Certificates are essential documents that protect both buyers and sellers. They ensure transparency, confirm ownership, reveal outstanding issues, and help facilitate a smooth and secure closing process.

Whether you’re preparing to list your home, getting ready to make an offer, or already under contract, understanding these documents helps you move forward with confidence—knowing exactly what to expect and what needs to be done.

If you ever have questions about these documents or how they affect your transaction, I’m here to guide you every step of the way!