I get asked a lot if Title Insurance is Important for a Texas real estate transaction. The quick answer, YES! And if you're obtaining financing to purchase the house, the short answer is, YES, it's mandatory!
Title insurance does exactly what it sounds like. It insures the title to the property. When you are under contract to purchase a property, the title company is running searches to see if there are any liens on the property as the seller is promising to transfer possession to the buyer with clear title.
What happens after closing when a contractor slaps a lien on the property for work that was done to the house a couple of months or years earlier? If you don't have insurance, as the new owner, you get to deal with it. If you have insurance, the title company will gladly take care of that for you.
Another example that can occur is your fence line. What if you want to replace your fence and after you take it down and look at where to put it back up, you find out that the fence is actually on/off your property by an amount. It could be inches, it could be feet. The title company will help figure out what the true boundaries of the property are to help secure your investment (there is an extra fee for boundary coverage that I hope you opted for).
At closing, when there is financing involved, the lender will not only require an Owner's Title Policy to be in place, but they will also put into place a Lender's policy. In Texas, even though it's negotiable, it's traditional for the seller to purchase the Owner's policy to ensure clear title. However, it's traditionally the buyer who pays for the Lender's policy since it's their lender requiring it.
Another fact to know is that Title Insurance is regulated in the state of Texas. In other states, you have to shop around for the best price for coverage. Here in Texas, you'll pay the same amount no matter what company you close your real estate transaction with. Because of this, we typically just look for customer service when negotiating which Title Company to close with.
In a Cash transaction, it's not required by anyone, like a Lender, to have Title Insurance, but I've never had a cash buyer opt not to have it. It's pretty important for the "what if" scenario!
Title Insurance is just like any other insurance; as soon as you don't have it, you'll need it!
**Are You Packed Yet?**
Donna Harris, REALTOR®
Donna Homes, Owner
Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way.
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Copyright© 2014 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.*Is Title Insurance Important in a Texas Real Estate Transaction?* was first published on donnahomesblog.com.