My clients have sometimes expressed frustration with Title Policy Insurance and the need to purchase it. I believe this often stems from a lack of understanding. Title Policy Insurance protects you in having a clean and clear title to the land your are purchasing.
Christy Wooten, Vice President and Escrow Officer with Highland Lakes Title in Horseshoe Bay, assisted me with providing the following information published by the Texas Land Title Association (TLTA).
‘Title insurance is a key component of real estate transactions, protecting buyers and lenders from financial losses caused by title defects or other problems, such as: Outstanding property taxes, Fraud and forgery found in deeds, and Claims against the property made by unknown heirs. Title insurance, a risk elimination product with premiums paid only once at closing, shouldn’t be confused with homeowners and auto insurance that protect against future hazards and must be purchased every year.’
In my experience, Title Policy Commitments have also provided unknown information about properties my clients desired to purchase such as easements and encumbrances. For instance, the right of an adjacent property owner to drive across your land or the fact that their improvements may have been built over property lines. This information often leads to corrective measures, but may also lead to a buyer deciding not to purchase a property. A larger example is finding out a third party holds a lien against a property that has not been satisfied.
Title Policy Insurance Premiums are regulated in Texas and you pay the same amount for a policy regardless of the provider. Per TLTA, Texas has one of the lowest claim rates in the nation which ranks Texas as one of the safest states in protecting real estate transactions.
Here’s the best news, premium rates in Texas have decreased 15% in the last 25 years! For example, a $150,000 policy in 1991 was $1,347. Today, that same policy would be $1,152. If you know of any other insurance that has decreased in costs in this time span, please share!
Much additional information is available from TLTA at www.TexasTitleWorks.com.
Curious about any local real estate topics? Please submit questions by email at [email protected], or feel free to give me a call on my direct line at 325-248-4369.
Jeff Spears is a Certified Luxury Homes Marketing Specialist and member of The Million Dollar Guild based on regularly selling homes in the top 10% of our market. Jeff Spears is a Licensed Broker in the State of Texas working with The Lake LBJ Group All City Real Estate in Horseshoe Bay. If you have a contractual relationship with another Broker, this is not a solicitation for your business.
