Texas real estate
closings

Notice that in a routine Texas closing, no one at the table is representing your interests specifically. That is fine when the transaction is clean. It is expensive when it is not.

Title insurance protects against defects that already exist when you buy — a forged deed in the chain, an undisclosed heir, an unreleased lien, a recording error, a boundary problem, or fraud committed years before you ever saw the property.

You cannot shop the premium, so stop trying. The Texas Department of Insurance promulgates title rates in its Basic Manual of Rules, Rates, and Forms, and every title insurer and agent must charge the published basic premium. The number is the same everywhere. What is not fixed is the escrow and closing fee, which varies by company — and, more importantly, so does service. Choose on responsiveness, on whether they will actually explain Schedule C to you, and on their wire fraud protocols.

Owner’s policy vs lender’s policy

• Lender’s policy — protects the lender up to the loan balance. Required for any financed purchase. It does nothing for you.
• Owner’s policy — protects you for the purchase price, for as long as you own the property, and covers the cost of defending your title.

Cash buyers sometimes skip the owner’s policy because nobody is making them buy it. That is the single worst place to save money in a Texas transaction.

The commitment is the title company’s promise to insure, subject to conditions. It comes in four schedules and most buyers never read past the first one.

Schedule C is the page to read first. Unreleased liens, a probate never completed, an heir who never signed, an old judgment, a quitclaim in the chain, unpaid taxes — each one is a requirement someone has to clear before the policy can issue. Discovering an open Schedule C item three days before closing is how deals fall apart. Ask for the commitment as early as possible and read that page immediately.

On Schedule B, the two exceptions worth attention are the survey exception (which can often be amended for a fee if an acceptable survey exists) and any mineral reservation, which in much of Texas means you may not own what is under the property.

A survey shows where the boundaries are and where the improvements sit relative to them — the fence that is two feet over the line, the shed built across an easement, the neighbor’s driveway clipping the corner.

Texas allows an existing survey to be reused if the seller signs a T-47 residential real property affidavit stating there have been no changes to the property since the survey was made, and the title company and lender accept it. That saves the buyer the cost of a new survey.

When you need a new one anyway. If anything has been built, added, moved, or fenced since the old survey; if the seller will not sign the T-47; if the lender rejects it; or if the old survey is simply too old for the title company’s comfort. Without an acceptable survey the broad survey exception stays in the policy, and boundary and encroachment problems are not covered.

This is not a boilerplate warning. It is the most likely way a Texas buyer loses everything at closing.

Criminals compromise an email account somewhere in the transaction — the agent, the lender, the title company, or the buyer — and watch. Near closing they send the buyer wire instructions that look exactly right: correct names, correct property, correct amount, plausible logo. The buyer wires. The money is gone within hours, usually overseas, and it is generally not recoverable. Homeowner’s insurance does not cover it and the title policy does not cover it.

The rule that prevents it. Never accept or act on wire instructions received by email, and treat any change to instructions as fraud until proven otherwise. Before sending a single dollar, call the title company at a phone number you looked up independently — from their website or a prior document, never from the email — and read the routing and account numbers aloud for verbal confirmation. Then call again after sending to confirm receipt.

Commercial transactions share the escrow mechanics and almost nothing else.

• No promulgated form. TREC forms do not apply. Every term is drafted and negotiated, which is both the risk and the opportunity.
• Real due diligence. Leases and tenant estoppel certificates, rent rolls, service and management contracts, environmental assessment, zoning and permitted use, certificates of occupancy, and existing debt to be assumed or paid off.
• Entity authority. Certificates of formation, company agreements or bylaws, resolutions, and certificates of good standing for every entity in the deal.
• Title work that matters. Easements, access, restrictive covenants, and encroachments can determine whether the property can be used the way the buyer intends.
• Negotiated title objections. Curing exceptions and obtaining endorsements is part of the deal, not an afterthought.

If you are forming or restructuring the entity that will hold the property, that work is on our business law page.