Make Sure You Get Paid; Title Commitment 101 For Agents

In a recent webinar hosted by Ryan Poole, CEO and founder of RealTrade, and James Brown, founder of New Path Title, the duo covered the critical yet often overlooked topic of title insurance commitments. Aimed at real estate agents, the session provided actionable insights to ensure smooth closings and secure commissions. Here’s a breakdown of the key points from the webinar, packed with practical advice to help agents navigate the complexities of title commitments.

The Importance of Title Commitments

Title commitments are the roadmap to a successful real estate closing. As James Brown emphasized, two things are essential for a sale: equity and title. While agents often focus on equity math, title math is equally crucial to ensure there’s enough money to cover commissions and close the deal. A title commitment outlines the steps needed to clear the title, ensuring the buyer receives clean ownership and the agent gets paid.

Why Title Matters

• Protects Against Past Issues: Title insurance covers claims from events that occurred before the closing, such as unpaid contractor liens. For example, if a roofer claims payment for work done months ago, title insurance handles it.
• Ensures Smooth Closings: By identifying issues like liens, judgments, or probate requirements early, agents can avoid last-minute surprises that derail deals.
• Saves Time and Money: Using tools like Title Advance can flag potential issues before they become costly problems.

Schedule B1: Your Roadmap to Closing

The heart of the webinar was a deep dive into Schedule B1 of the title commitment, which lists the requirements to close the sale. James called it “the one thing every agent must know” to ensure they get paid. Here’s how to read it:

1. Check the Vested Party: Ensure the seller named in the contract matches the party listed as “vested in title” on the commitment. Mismatches can delay or derail deals.
2. Verify Legal Descriptions: The legal description in the contract must match the one in the title commitment. Errors here, like omitting an easement, can lead to disputes (e.g., a buyer missing out on beach access due to a faulty description).
3. Identify Requirements: Schedule B1 lists what’s needed to close, such as:
   • A warranty deed from the seller.
   • Payoff of mortgages or liens (with book and page numbers for public record lookup).
   • HOA approvals or estoppel letters.
   • Probate documents, if applicable (e.g., a personal representative’s deed).

Pro Tip: Use Title Advance

Ryan highlighted Title Advance, a free tool that provides a preliminary title report in minutes. It reveals liens, judgments, or probate issues early, saving agents from wasted effort on problematic deals. Access it via RealTrade’s dashboard or New Path Title.

Schedule B2: Understanding Exceptions

Schedule B2 lists exceptions to title insurance coverage—issues not covered in case of a claim. Brown shared a key rule for evaluating exceptions:

• Acceptable Exceptions: If the exception applies to all properties in the community (e.g., utility easements or HOA covenants), it’s typically fine.
• Unacceptable Exceptions: If it only affects your property (e.g., a private easement across your backyard), it could impact the buyer’s use of the property and needs further investigation.

Common B2 Issues

• Oil, Gas, and Mineral Rights Reservations: These can allow third parties to access the property for extraction. Ensure there’s a release of surface exploration rights to prevent disruptions.
• Easements for Ingress/Egress: Check if they limit property use (e.g., preventing a pool or screen enclosure). Request a survey to locate easements.
• Unrecorded Leases: Verify with the seller’s affidavit that no one occupies the property under an unrecorded lease.

Probate and Trust Challenges

Properties in probate or trusts can complicate closings. James outlined red flags in Schedule B1 that signal probate issues:

• Personal Representative: Indicates an estate issue requiring probate.
• Deedent: Confirms the property is part of a probate action.
• Petition for Administration: Another probate clue.

For trusts, agents should request a copy early and check for language indicating assets “distributed under the will,” which could trigger probate. Early communication with sellers about trust documents avoids delays.

Final Thoughts

The webinar underscored the power of preparation in real estate. By mastering title commitments, using tools like Title Advance, and staying proactive, agents can protect their commissions and deliver value to clients. 

Join us on RealTrade—it’s free, connects you with leads, and links you to pros like James. Let’s keep learning, growing, and closing deals smarter.

Resources to Bookmark

• New Path Title: Visit newpathtitle.com under “Realtor Resources” for the webinar recording and outline.
• Title Advance Link: for fast, no-cost reports that help realtors win listings and close faster. These reports include critical details on mortgages, liens, encumbrances, open permits, code violations, taxes, and utilities—everything needed to streamline your sale!
• RealTrade YouTube: Catch past sessions and links to tools like Title Advance and our closing cost calculator.
  

   

  Got questions? Text James at New Path Title’s 24/7 attorney support (561) 307-0885 or message me (Ryan Poole) on RealTrade. Here’s to your next big win!