How do you choose a title company in Texas? Both federal
and state laws specifically enforce the consumers’ right to
choose their title services provider in a real estate transaction.
However, most consumers lack the knowledge to differentiate
between title companies, and default to a vendor chosen by
their real estate agent or
New rules adopted by the
Consumer Financial Protection
Bureau provide fresh emphasis
on consumer choice, but again,
there are no stated guidelines to
help home buyers and sellers
make an informed decision on
what company should handle
their transaction. Most
consumers aren’t sure what title companies really do, much
less how to judge which one is “best.”
In Texas, title insurance rates are set by the Texas Department
of Insurance, so there is no price differentiation to help steer a
consumer toward one company over another. All title policies
cost the same one-time fee, based on the sales price of the
property, and processing fees charged by title companies
cluster around a narrow range.
So, how do you know? What do you ask? What search
criteria do you put in the box?
Here is a brief primer on some factors that can truly affect the
experience of your transaction, with some clarifying questions
to ask as you talk to your real estate agent or mortgage lender,
or as you browse title company websites in search of clues.
ARE THERE CONVENIENT LOCATIONS?
With the parties to your transaction in mind, does the title
company have a location that is reasonably accessible?
Despite the conveniences of the digital age, many aspects of
the transaction are best handled in person, and some
documents still need “wet signatures” to be legally binding.
Title companies without many options as to brick and mortar
locations will offer mobile notary services, but you sacrifice
the benefit of working face-to-face with the escrow officer or
“closer” who put the transaction together. The closer is
empowered to answer questions, catch discrepancies in the
documents, make changes as needed to close the transaction
smoothly, and manage the
process of completing and
funding the transaction. A notary
merely affirms the signatures and
cannot provide any other
Like any insurance policy, title
policies are underwritten by a
financial holding company that
would pay the cost of a claim. The underwriter makes the
rules that determine whether your transaction is insurable. This
is a business decision that turns on many factors that come up
in researching the history of the property. Are there gaps in
the “chain of title,” or the history of ownership? Are there
buildings that don’t conform to property lines? These issues
and hundreds more are considered when a title underwriter
assumes the risk of insuring the sale of a property from one
owner to another.
When choosing a title company, investigate whether the
company has multiple options as to underwriters. Some
companies are direct operations of national underwriters, with
just a single set of underwriting guidelines. An alternative is a
title agent, an independent company often with multiple
underwriters behind them. This might make a difference on a
more complicated transaction, because the title agent can
shop among several underwriters to find one with guidelines
that offer workarounds.
WHERE IS THE TITLE RESEARCH HANDLED?
Many large title companies have followed national trends and
sent behind-the-scenes jobs to other states or other countries,
particularly parts of the title research process. On the ground
in your town, this can impact the ability of local employees to
texas title insurance
YOU HAVE THE POWER...
DO YOU KNOW HOW TO USE IT?
By Kara McGregor, Senior Vice President of Business Development, Independence Title
“Most consumers aren’t sure
what title companies really do,
much less how to judge
which one is ‘best’.”