Escrow & TitleIntermediateDelaware Exam

What is a 'title commitment' (also called a title binder or preliminary title report) in Delaware?

AA promise by the buyer to purchase the property

BA title insurer's commitment to issue a title insurance policy, subject to stated exceptions and requirementsCorrect

CA lender's commitment to fund the mortgage loan

DSimply the seller's own personal, informal commitment to deliver clear title by the closing date, in most cases

Why A title insurer's commitment to issue a title insurance policy, subject to stated exceptions and requirements Is Correct

Answer B: A title insurer's commitment to issue a title insurance policy, subject to stated exceptions and requirements

A title commitment is a title insurer's promise to issue a title insurance policy (owner's and/or lender's) after reviewing the title search. It lists: Schedule A (basic transaction details), Schedule B-I (requirements that must be met before closing), and Schedule B-II (exceptions that will appear in the final policy).

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

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Key Terms to Know

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Discount Points

Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

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