A large lot in a well established subdivision in Brazos Valley. Hundreds of homes already built in it and this vacant lot is in an old phase. Cash sale.

Supposedly title insurance claims are less than 2%. We are thinking we can skip?

https://texags.com/forums/59/topics/3434278

Jay@AgsReward.com said:

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https://texags.com/forums/59/topics/3434278

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I wonder if we'll get an update on that one.

MS08 said:

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Been a part of hundreds of real estate transactions. Have procured title insurance either as the buyer or seller every time. Have only had to use it twice, both as the buyer of the property, but sure thankful it was in place. Claims are a very seamless process.

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What was the claim?

things change

Diggity said:

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things change

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I'm ignorant. What changes? If we have a record of deeds, what could change?

Lots of things. Liens for one.

Diggity said:

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Lots of things. Liens for one.

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Liens are filed through the county and removed through the county. Correct? Isn't that what we pay the title company to search for?

I don't disagree that resiidentlal title is a bit of a racket in many cases, but you're oversimplifying the process.

Although I have been reading that somehow blockchain will solve this problem for years now.

You need title insurance. Numerous reasons.

Yesterday said:

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MS08 said:

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Been a part of hundreds of real estate transactions. Have procured title insurance either as the buyer or seller every time. Have only had to use it twice, both as the buyer of the property, but sure thankful it was in place. Claims are a very seamless process.

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What was the claim?

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One was an unpaid property tax bill since title company did not assess the property taxes at time of closing b/c they were under impression Seller already paid. County filed a lien so had to file a title policy claim since the property tax bill was for a duration of time prior to our ownership. So the title policy company ended up paying that property tax bill, we did not.

Other one was a demolition lien the city had on a property from the 80s. First title company did not pick it up and we closed in cash; when we went to close on our development financing that title company found the lien and it had to be paid for us to close on our development loan. After that closing we filed a title claim and were reimbursed for payment of that lien.

MS08 said:

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Yesterday said:

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MS08 said:

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Been a part of hundreds of real estate transactions. Have procured title insurance either as the buyer or seller every time. Have only had to use it twice, both as the buyer of the property, but sure thankful it was in place. Claims are a very seamless process.

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What was the claim?

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One was an unpaid property tax bill since title company did not assess the property taxes at time of closing b/c they were under impression Seller already paid. County filed a lien so had to file a title policy claim since the property tax bill was for a duration of time prior to our ownership. So the title policy company ended up paying that property tax bill, we did not.

Other one was a demolition lien the city had on a property from the 80s. First title company did not pick it up and we closed in cash; when we went to close on our development financing that title company found the lien and it had to be paid for us to close on our development loan. After that closing we filed a title claim and were reimbursed for payment of that lien.

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Thanks for explaining. I feel in both instance insurance wouldn't be needed. The title company is responsible.

Thinking here. Maybe if your closing title company goes under and can't make it right insurance would come into play.

Why is title insurance in Texas so much more expensive than other states?

Aggiemike96 said:

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Sounds a lot like insurance to ship packages. I pay USPS to ship my package. And, then have to pay more to insure that they deliver the package safely? Airlines don't charge extra to insure that they did their job correctly.

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You don't have to get it. I do this for a living and always get it...doesn't matter how good the deal is. It does seem like a racket at times...they'll only insure if you they meet xyz conditions. You're both paying for them to make sure it's clean and chase down any claims against the property and paying for insurance in case something is missed.

I don't know the particulars around the transaction. But I'd hate to find out I bought something for several hundred thousand only to find out that their are several liens against the property or they don't own it.
And an Individual is going to have a hard time figuring all this stuff out. It's likely more complex than going to the County Clerk's website.

Yesterday said:

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Diggity said:

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Lots of things. Liens for one.

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Liens are filed through the county and removed through the county. Correct? Isn't that what we pay the title company to search for?

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People also commit fraud and file lien releases. 1 guy even routed a google number to his phone and when they called pretended to be the lender who released the lien. Title company wears this risk. Anyone can file anything with the county. Just need to notarized and stamp it. The fraudsters know how to do this.

I have a list of Harris county names that have done this. Somehow they never go to jail. They don't just operate in Harris county.

OilAg01 said:

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Yesterday said:

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Diggity said:

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Lots of things. Liens for one.

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Liens are filed through the county and removed through the county. Correct? Isn't that what we pay the title company to search for?

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People also commit fraud and file lien releases. 1 guy even routed a google number to his phone and when they called pretended to be the lender who released the lien. Title company wears this risk.

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That is a risk worth insuring but if the title company wears the risk why are we buying insurance. Sounds like the consumer wears the risk which is why they're selling insurance.

I'm not trying to be hostile just really trying to understand what the title company guarantees.

The product the title company provides is the title insurance.

exactly. that seems to be the misunderstanding.

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What does title insurance protect you from?

It protects you against loss due to title defects, liens, or other similar matters. Title insurance protects you from claims of ownership by other parties. It protects you against losses from problems that arose before you bought the property. The title company will defend you in court if there is a claim against your property and will pay for covered losses.

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https://www.tdi.texas.gov/title/titlefaqs.html

mhnatt said:

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A large lot in a well established subdivision in Brazos Valley. Hundreds of homes already built in it and this vacant lot is in an old phase. Cash sale.

Supposedly title insurance claims are less than 2%. We are thinking we can skip?

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No. You want owners title insurance. I was in that biz for a decade plus. Do it, just in case.

If I was buying a lot directly from a developer in a new subdivision I would never pay for title insurance. The chain of title is checked and re-checked so many times along the way from original prelim plat, to plan review, then at Final Plat that the risk is virtually zero. I would just get a title report and a tax cert before closing.

Title insurance in this scenario is a scam. When you are talking about rural land with complex title history, it could possibly be useful. When you're talking about residential lots, it is useless and a scam.

Well said Steve

Thanks for pointing out who owns title companies and who sits in Austin making the rules. I think it's safe to say racket is the nicest thing one can say about the title insurance industry in Texas.

Title insurance is like all insurance. It is a waste of money until you need it. You may never need it but as someone who has had to use it I was really glad we had it. I would also add on this, especially on rural property, pay for the additional survey coverage. Just like everyone else, sometimes surveyors make mistakes and it can become a real problem, especially when it affects access to property.

Yesterday said:

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OilAg01 said:

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Yesterday said:

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Diggity said:

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Lots of things. Liens for one.

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Liens are filed through the county and removed through the county. Correct? Isn't that what we pay the title company to search for?

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People also commit fraud and file lien releases. 1 guy even routed a google number to his phone and when they called pretended to be the lender who released the lien. Title company wears this risk.

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That is a risk worth insuring but if the title company wears the risk why are we buying insurance. Sounds like the consumer wears the risk which is why they're selling insurance.

I'm not trying to be hostile just really trying to understand what the title company guarantees.

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In Texas you aren't paying a separate title search fee, at least you shouldn't be. The title premium that you pay for title insurance is meant to be all inclusive for the costs involved with the title search and title coverage after the sale (coverage is actually perpetual because you could also be sued for breach of warranty of title long after you no longer own the property and title insurance would cover that) so I'm not sure I understand your argument that title company is charging you for searching title and then turning around and charging you again for title insurance because that's now how it works in Texas. In other states it varies (which is why it's not an apples to apples comparison when someone says title premiums in Texas are higher than other states).

The other fee a title company in Texas may charge is a settlement or escrow fee, but that fee is only meant to cover the cost of putting together the closing statement, handling the funds, etc all that goes along with the actual closing - not the actual title search or title policy.

I'm one of those scammy attorneys (though I no longer own a title company) but I do have nice furniture and stuff so take it for what it's worth, but I personally would not buy real estate without title insurance. Ultimately like all insurance, it just depends on how risk averse you are. I do find it somewhat humorous that the usual suspects crapping on title insurance all make their livelihood selling loans to lenders that require it on every transaction, so their customers must see some value in it.

The issue with Texas title insurance is it's control by the insurance board and lack of free market making the costs artificially high compared to other states.

unmade bed said:

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Yesterday said:

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OilAg01 said:

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Yesterday said:

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Diggity said:

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Lots of things. Liens for one.

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Liens are filed through the county and removed through the county. Correct? Isn't that what we pay the title company to search for?

---

People also commit fraud and file lien releases. 1 guy even routed a google number to his phone and when they called pretended to be the lender who released the lien. Title company wears this risk.

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That is a risk worth insuring but if the title company wears the risk why are we buying insurance. Sounds like the consumer wears the risk which is why they're selling insurance.

I'm not trying to be hostile just really trying to understand what the title company guarantees.

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In Texas you aren't paying a separate title search fee, at least you shouldn't be. The title premium that you pay for title insurance is meant to be all inclusive for the costs involved with the title search and title coverage after the sale (coverage is actually perpetual because you could also be sued for breach of warranty of title long after you no longer own the property and title insurance would cover that) so I'm not sure I understand your argument that title company is charging you for searching title and then turning around and charging you again for title insurance because that's now how it works in Texas. In other states it varies (which is why it's not an apples to apples comparison when someone says title premiums in Texas are higher than other states).

The other fee a title company in Texas may charge is a settlement or escrow fee, but that fee is only meant to cover the cost of putting together the closing statement, handling the funds, etc all that goes along with the actual closing - not the actual title search or title policy.

I'm one of those scammy attorneys (though I no longer own a title company) but I do have nice furniture and stuff so take it for what it's worth, but I personally would not buy real estate without title insurance. Ultimately like all insurance, it just depends on how risk averse you are. I do find it somewhat humorous that the usual suspects crapping on title insurance all make their livelihood selling loans to lenders that require it on every transaction, so their customers must see some value in it.

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I guess that's where the wires are crossed. I thought we were discussing additional title insurance. I'll have to look at our last closing but we had an additional insurance. Perhaps it was survey insurance. Now it makes more sense.

OK, here we go. I own a title company in West Texas. Like all lines of insurance, title is highly regulated by the government. In Texas, the Department of Insurance is the state agency charged with oversight of title insurance. In fact, Texas has the most tightly regulated title insurance industry in the United States. Both rates and forms are standardized, meaning the language of the policy is the same, regardless of the title company (also known as an underwriter) issuing the policy, and the premium amount charged for the policy is the same no matter which title insurance agent you choose.

When you purchase a title policy in Texas, you should know that the rates, terms and coverages are set by the Texas Department of Insurance, and all title professionals are legally bound to those requirements. Because title professionals can't compete on price or product, they must compete on the quality of service they provide. In some states, they have competitive rates and the number of claims in those states go up tremendously.

The behind-the-scenes work of the title company promotes and ensures an efficient and secure transfer of real estate from the seller to the buyer. Title insurance doesn't guarantee that you will never have a problem, but it does give you the assurance and peace of mind that the title company will be there to address a problem if there is one. Unlike other types of insurance, the premium for your title policy is paid only once, and your policy remains in effect as long as you own the property. A title policy is your guarantee that the home you are buying is protected from covered title problems. There are a couple of states that don't have title insurance and problems are rampant. Most of the time they get an Attorneys Opinion which carries no insurance benefit if the attorney makes a mistake.

You are not required to get a title policy when you buy real estate. However, most lenders will want a title policy for themselves. If you are purchasing a Loan Title Policy, then the additional cost is only $100 plus endorsements to include the Owners Title Policy. Most sellers end up purchasing the title insurance policy because it's peace of mind for them. They don't have to worry about someone down the line coming back to them about a unknown lien or predecessor in title that wants their money. Remember, transactions require the seller to provide a General Warranty Deed whereby the seller is guarantying the title to the property.

Bottom line, it really doesn't cost that much especially when the lender requires a title policy for themselves. The insurance you receive and peace of mind is well worth the cost.

This is one of the dumber things I have read lately. What does an established subdivision and an older phase have to do with thinking there is reduced risk.

I am a safe driver so I should cancel my car insurance because I'm never gonna get in an accident. And I'm pretty healthy so why would I pay for life insurance? Stop being cheap people and cutting corners. Reread the post about the person only getting a partial interest because who needs title insurance when the seller seemed charming and assured everything would be fine. A title commitment would have shown this in 2 seconds.