Is paying an attorney to read the title commitment worth it when you already have title insurance?
Under contract on a small mixed use building, first purchase over $500k for me. Title commitment came back with fourteen exceptions on Schedule B and I understood maybe nine of them. My agent said the title company already reviewed it. My mortgage broker said the policy covers me. An attorney quoted $850 to read the commitment, the survey and the recorded documents behind the exceptions, and to tell me in writing what's actually a problem.
Case for paying. Title insurance pays for defects it covers, and Schedule B exceptions are the list of things the policy specifically does not cover. If exception 11 is an easement running through the middle of the parking area, the policy doesn't help me, and the only person whose job it is to tell me that before closing is someone I hire. What's excepted, how exceptions are worded, and which ones can be removed by endorsement all vary by state and by underwriter.
Case against. The title company has read it, the lender's counsel has read it for the lender, and $850 on a purchase where I already have two other parties looking at the same page may be paying for a third opinion on documents that are mostly standard. Most exceptions on most commitments are utility easements and subdivision plat restrictions that nobody has ever cared about. And the survey is where a real encroachment shows up, not the commitment.
I can afford the $850. What I can't tell is whether I'm buying information or comfort.
Attorney review of the title commitment on a purchase where you already have an owner's policy?
23 votes