What does a Title Commitment represent in real estate?

A Title Commitment represents a promise to issue a title insurance policy under certain conditions. It serves as an initial step in the title insurance process, outlining the terms under which the title insurance will be granted. The document typically details any exceptions or exclusions, conditions that must be satisfied for the policy to be issued, and it confirms the intended buyer's title to the property.

The Title Commitment is crucial because it provides assurance to potential buyers and lenders that the title insurer is willing to insure the title once specified requirements are fulfilled. This includes ensuring there are no liens, encumbrances, or other issues that could affect ownership rights. The buyer can use this information to make informed decisions about the transaction.

The other provided options do not accurately describe a Title Commitment. A license to conduct business refers to legal permission to operate but does not tie into title insurance. A guarantee of land ownership suggests a definitive assurance of ownership rights, which a Title Commitment does not provide; rather, it addresses insurance for those rights. An official deed transfer represents the act of transferring ownership of property itself, while a Title Commitment precedes this action, acting more as a preparatory document for validating and protecting ownership rights.