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 mortgage lender.
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 service.
Who’s underwriting the transaction?
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 under writer assumes the risk
of insuring the sale of a property from one owner to another.
texas title insurance:
YOU have the
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’.”