Before a home sale can close, there’s one critical document that connects the dots between the property’s history, ownership, and title insurance — the title commitment. Often misunderstood by buyers and even some industry pros, this document is the bridge between discovering a property’s past and ensuring a clean, insurable future.
In this guide, we’ll break down what a title commitment is, why it’s required in real estate transactions, and how to read each section confidently. Whether you’re a homebuyer, lender, or real estate agent, understanding the title commitment can save time, money, and future headaches.
A title commitment—also called a commitment for title insurance—is a binding document issued by a title insurance company. It represents that company’s commitment to issue a title insurance policy once certain requirements are met before closing.
In simple terms, it’s a preview of the title insurance policy that will protect the buyer and lender against title defects, liens, or ownership disputes that could affect the property.
When you see the phrase “what is a title commitment in real estate,” think of it as a promise with conditions. The insurer agrees to issue a title insurance policy if and when all listed requirements are satisfied — such as paying off existing liens or confirming the legal description matches the property being sold.
In every real estate transaction, the title commitment functions as a safeguard. It ensures that:
Without a valid title commitment, the closing cannot proceed, since lenders rely on it to confirm insurance coverage, ownership, and lien clearance.
The American Land Title Association (ALTA) standardized the title commitment format to help all parties clearly understand what’s included and what’s required.
Every title commitment follows a standard structure, often divided into four main sections. Each section plays a unique role in defining the property, requirements, and insurance details.
Let’s explore what’s inside.
Schedule A provides the foundation — the “who, what, and how much.”
This is the section that answers the most critical questions in the commitment for title insurance.
Schedule A includes:
This “basic information” ensures that the commitment accurately matches the subject property and the real estate transaction in progress. If anything in Schedule A is incorrect, the title policy may be invalid after closing.
This section lists everything that must be done to move from title commitment to final title policy — often called the order to close stage.
Common requirements include:
Until these requirements are met, the commitment to issue the policy remains pending. For lenders, this is the checklist that must be satisfied to finalize their insurance coverage.
Every title commitment includes exceptions — items that the title insurance company will not cover in the final policy. These may include:
Understanding these exclusions is crucial. Buyers should review this list carefully with their real estate attorney or title agent to ensure there are no hidden issues that could affect the property after closing.
Some title companies include a Schedule C for state-specific notes or information about the property. This section might include pending lawsuits, probate actions, or tax sale redemptions.
Though not always required, Schedule C serves as an extra layer of disclosure for anything that could delay the order to close.
Let’s say you’re purchasing a home for $450,000. The title insurance company issues a title commitment with an amount of insurance equal to the sales price.
Once the lender verifies all requirements are met, and the title company confirms lien releases, the transaction can close the transaction. The final title policy is then issued based on the commitment’s terms.
The commitment for title insurance acts as both a report and a contract. It identifies any risks before money changes hands and ensures the insurance coverage reflects those findings accurately.
Without a clear commitment to issue, lenders cannot safely finalize the loan or record the mortgage.
Here’s a breakdown of important terms you’ll find throughout a title commitment:
| Term | Meaning |
|---|---|
| Commitment for Title Insurance | The title company’s promise to issue a policy after requirements are met. |
| Legal Description | The formal description of land boundaries — more precise than a mailing address. |
| Proposed Insured | The buyer or lender who will be covered under the policy. |
| Fee Simple | The highest form of property ownership, giving full rights to the owner. |
| Subject Property | The parcel of real estate being insured. |
| Amount of Insurance | Typically equal to the purchase price or loan amount. |
| Order to Close | The step where all title requirements are cleared so the transaction can finalize. |
These definitions connect directly to how title companies and attorneys ensure information about the property matches what’s being transferred.
A title commitment is not the same as a title insurance policy — it’s a promise to issue one. The commitment to issue states that the title insurance company will provide a final policy after all listed requirements are met.
If requirements aren’t satisfied — for instance, a lien remains unpaid — the title insurer can decline to issue coverage or adjust the amount of insurance accordingly.
This clause protects both sides by defining the conditions under which insurance coverage becomes valid.
It’s easy to confuse the two, but they serve different purposes in a real estate transaction.
| Feature | Title Commitment | Title Policy |
|---|---|---|
| Timing | Issued before closing | Issued after closing |
| Purpose | Outlines conditions for coverage | Provides final insurance protection |
| Focus | Lists requirements and exceptions | Guarantees protection against covered title defects |
| Binding Effect | Conditional | Fully enforceable |
| Used By | Buyers, lenders, closing agents | Buyers, lenders, and claim adjusters |
The title commitment meaning centers on preparation and due diligence. The title policy finalizes protection once ownership officially transfers.
A title insurance company—or an authorized title agent—prepares the title commitment after conducting a full title search.
The process typically includes:
These findings are then summarized into the sections we discussed earlier. The buyer and lender receive copies to review before closing.
A title commitment directly impacts your closing costs because it outlines the insurance coverage that will be purchased. The premium is based on:
In most states, title commitments are valid for a limited period, typically 60–90 days, which means delays in closing could require an update or reissue.
During review, title professionals may uncover:
Addressing these early keeps the order to close on schedule. The title company coordinates resolution so both buyer and lender can close the transaction confidently.
The American Land Title Association sets the national standards for title commitments and title insurance. ALTA’s uniform forms ensure every part of the title commitment—from Schedule A to Schedule B-II—follows consistent terminology and formatting, making it easier for lenders and attorneys to interpret across states.
These standardized section lists help avoid confusion and streamline compliance during real estate transactions.
A title commitment isn’t just paperwork — it’s the foundation for secure ownership. It defines the exact information about the property, discloses potential issues, and ensures the commitment to issue valid insurance coverage once conditions are met.
When reviewing your title commitment, take time to: