A Texas title company performs several critical functions in a real estate transaction. Understanding what they do helps you know what to expect at closing.
Title Search and Examination
The first thing a title company does is research the property's title history. This includes reviewing public records going back decades to trace the chain of ownership. The title examiner looks for liens, judgments, easements, restrictions, and any other encumbrances that could affect ownership.
In Texas, the title search typically covers the county clerk's records, district court records, and any other relevant public records. The examiner produces a title commitment that outlines the condition of the title and any issues that need to be resolved before closing.
Escrow Services
The title company acts as a neutral third party in the transaction. They hold earnest money, coordinate with the lender, collect and distribute funds at closing, and ensure all conditions of the sale are met before the deed transfers.
Title Insurance
Title insurance protects the buyer and lender from financial loss due to title defects that weren't discovered during the title search. In Texas, title insurance rates are set by the state, and the policy covers risks like forged documents, unknown heirs, recording errors, and other defects.
Closing Services
The title company prepares the closing documents, including the deed, settlement statement, and title insurance policies. They conduct the closing, ensure all documents are properly signed and notarized, record the deed, and disburse funds according to the settlement statement.
Why It Matters in Texas
Texas is an "attorney state" for title insurance, meaning title insurance policies are issued by title companies that employ or work with licensed attorneys. This provides an additional layer of legal expertise in the closing process.
At 1st Option Title, we handle all of these functions with the expertise and attention to detail that every transaction deserves.