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Tom Sommers' Blog

Realtorology

By Tom Sommers | Agent in Lakeville, MN

Why a marked up title commitment can save you when buying a home.

A marked up title commitment or (marked up title binder) is something most people have never heard of. If you are a buyer it is something you want to know about especially when buying a foreclosure or short sale.

This document is something the buyers closer does before the closing that tells the title company what items in the title search will remain on the owners policy and be covered as well as the items that will be removed and not covered. If you take anything away from reading this it should be that in the state of Minnesota you as a buyer have a right to choose your own title company. Do not think you have to use the sellers or banks title company. You want someone who is in your corner protecting your interests.

By asking for this document at closing you will know what is going to be covered such as easements and other things. Gap coverage is probably the most important thing you want. When the title work is pulled before the sale that is the 1st date on the policy so you as the buyer are covered until the county records the deed in your name. The period between those two dates is the gap. On average most counties are running about 6 months behind in their recording, some more some less. If you call them they will tell you they are up to date but most are not. You want coverage during this time as well because this is when most problems can arise. An example would be lets say the seller took out a loan on the home two days before closing and it didn't show up in the title search. Without that coverage you would have to deal with that bank because it would not be covered by the policy. With gap coverage it would be covered and the title insurance would have to deal with it.

This is why a good real estate agent will help to get this for you when you are being forced to use a title company not of your choosing. It is also another piece of information to help you in the event that a problem does come up. If that title company closes its doors the only way to know who the policy is insured by is to have this kind of information. It should be provided to you free of charge at your request.

Moral of the story use a reputable title and closing company that will look out for your best interests.

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Comments

By Dan Chase,  Fri Dec 4 2009, 16:56
If only we could find out which title insurance companies are really solvent and do not remove those things you mentioned we would have a big advantage.

Nice blog, thank you.
By Tom Sommers,  Fri Dec 4 2009, 18:19
Thanks Dan I hope it helps. It really comes down to asking for the documentation and choosing a good title company.

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