Escrow & Title
In South Dakota, a preliminary title report or title commitment is issued by a title company to:
ACertify clear title to the property
BShow the current state of title and conditions required for issuance of the final title insurance policy✓ Correct
CReplace the need for a property survey
DProvide the buyer with a home warranty
Explanation
A title commitment reports what the title company found in their title search, lists any exceptions or conditions to coverage, and commits to issuing a title insurance policy when those conditions are met.
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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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
EasementA non-possessory right to use another person's land for a specific purpose.
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