Finance
What is the purpose of a 'title commitment' (also called a commitment for title insurance) in a Pennsylvania closing?
AIt commits the buyer to purchase the property at the agreed price regardless of inspection results
BIt is the title insurer's preliminary agreement to issue a title insurance policy after specified conditions (requirements) are met at or before closing✓ Correct
CIt is the lender's commitment to fund the mortgage loan at the agreed interest rate
DIt commits the Pennsylvania Real Estate Commission to oversee the closing process
Explanation
A title commitment is the title company's preliminary report and agreement to issue a title insurance policy after the closing, provided specified requirements are met — paying off existing liens, obtaining release deeds, correcting title defects, and other conditions. The commitment discloses the current state of title, including existing liens, easements, deed restrictions, and exceptions that will appear in the final policy. Pennsylvania buyers and their attorneys should carefully review the title commitment before closing to understand what the policy will and will not cover.
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