Title Insurance Binder
Definition and meaning of Title Insurance Binder in real estate.
A title insurance binder is a temporary document issued by a title insurance company that commits to insuring the property's title, subject to specific conditions, requirements, and exclusions.
In more detail
Also known as a title commitment in many states, this binder acts as a bridge between the initial title search and the final issuance of the policy at closing. It details the current state of the title, listing the requirements that must be met to clear the title, such as paying off existing mortgages or resolving tax liens.
It also outlines exclusions, which are items the insurance company will not cover, such as recorded public easements. For buyers and lenders, reviewing the binder is a vital step to verify that the property can be transferred without lingering legal issues.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Also known as | Title commitment, preliminary title report |
| Purpose | Temporary agreement outlining conditions for final policy issuance |
| Issued by | Title insurance underwriter or agency |
Before releasing the loan funds, the lender reviewed the title insurance binder to ensure the seller had agreed to pay off the outstanding property taxes.
Frequently asked questions
What is the difference between a title binder and a title policy?
A title binder is a temporary commitment outlining the conditions required to issue the final insurance policy, which is officially issued after closing.
What are exclusions in a title binder?
Exclusions are specific items or conditions, such as local zoning laws or visible utility easements, that the title insurance policy will not cover.