What Is "Title" and Why Does It Matter?
When you buy a home, you're not just buying the physical building - you're buying the title , which is your legal right to own and use that property. Think of the title as your proof of ownership.
But here's the thing: property ownership in America goes back centuries, and along the way, all kinds of complications can arise. People die, get divorced, don't pay their taxes, take out loans, give easements to utility companies, and make handshake deals with neighbors. All of these events can create "clouds" on the title - potential claims that could threaten your ownership.
What Could Go Wrong Without Clear Title?
- A previous owner's unpaid contractor could place a lien on the property and demand payment from you
- An heir you didn't know about could show up claiming partial ownership
- A clerical error from 1987 could mean the seller doesn't actually own what they're selling
- Someone could forge documents and sell a property they don't own (yes, this happens)
This is why title searches and title insurance exist - to find these problems before you buy and protect you if something slips through.
The Title Search Process
Before you can close on a home, a title company will conduct a thorough search of the property's history. Here's what happens:
Order Placed
After you go under contract, the title company (usually chosen based on local custom or contract terms) begins their search. In Texas, the buyer's agent typically orders title work.
Public Records Search
The title company searches county records going back 40-60 years or more, looking at deeds, mortgages, court records, tax records, and any other documents that could affect ownership.
Title Commitment Issued
You'll receive a "title commitment" (also called a preliminary title report) showing what they found. This document lists any issues, exceptions, or requirements that must be addressed before closing.
Issue Resolution
Any title issues must be cleared before closing. This might involve the seller paying off liens, obtaining releases, or resolving disputes. The title company coordinates this process.
Title Policy Issued
Once all issues are resolved and you close, the title company issues your title insurance policy, protecting you against any problems that might surface later.
Common Title Issues (And What They Mean)
Here are the most common problems that title searches uncover:
Liens
A legal claim against the property for unpaid debts. Common liens include unpaid property taxes, HOA dues, mechanic's liens from contractors, and judgment liens from lawsuits. These must be paid off before closing.
Easements
An easement gives someone else the right to use part of your property for a specific purpose. Utility easements are common and usually not problematic. Others, like shared driveway easements, may affect how you can use your property.
Boundary Disputes
When property lines are unclear or disputed with neighbors. This might involve fences built in the wrong place, structures that cross property lines, or conflicting surveys.
Ownership Questions
Issues with how the property was transferred in the past. Missing signatures on old deeds, improperly recorded transfers, or heirs who weren't included in a sale can all create ownership questions.
Encroachments
When a structure (fence, shed, part of a building) extends onto neighboring property - or when a neighbor's structure extends onto the property you're buying.
Unpaid Taxes
Property tax liens take priority over almost everything else. If the seller owes back taxes, this must be resolved at closing. In Texas, property tax liens are particularly serious.
What Happens When Issues Are Found?
Identify the Problem
The title company explains what they found and what needs to happen to clear it.
Seller's Responsibility (Usually)
Most title issues are the seller's responsibility to resolve. They might need to pay off liens, obtain releases, or work with attorneys to clear ownership questions.
Resolution Timeline
Simple issues (like paying off a small lien) can be resolved quickly. Complex issues (like disputed ownership) may take weeks and could delay closing.
Your Options
If issues can't be resolved, you typically have the right to cancel the contract (assuming you have a title contingency) and get your earnest money back.
Owner's vs. Lender's Title Insurance
There are two types of title insurance, and in Texas, you'll typically get both:
Lender's Title Insurance
Protects the mortgage company
- ✓ Required for virtually all mortgages
- ✓ Protects the lender's investment in the property
- ✓ Coverage amount equals the loan amount
- ✓ Decreases as you pay down your mortgage
- ✓ Ends when you pay off or refinance the loan
- ✓ Does NOT protect you as the homeowner
Owner's Title Insurance
Protects YOU
- ✓ Optional but highly recommended
- ✓ Protects YOUR equity and ownership rights
- ✓ Coverage equals the purchase price
- ✓ Can increase if you add value to the property
- ✓ Lasts as long as you (or your heirs) own the home
- ✓ One-time premium, lifetime protection
Always get owner's title insurance. The one-time cost (typically 0.5-1% of the purchase price) provides protection for as long as you own the home. Without it, you're personally responsible for defending your ownership if a problem surfaces.
Texas Title Insurance: What's Different
- Rates are regulated: Unlike most states, Texas sets title insurance rates by law. This means you'll pay roughly the same rate regardless of which title company you use.
- Title companies handle closings: In Texas, the title company (not an attorney) typically conducts the closing and handles the escrow.
- Who pays what: Texas custom varies by county. In DFW, the seller traditionally pays for the owner's title policy, while the buyer pays for the lender's policy. However, this is negotiable.
- Survey requirements: Texas title companies usually require a current survey. If the seller doesn't have one, this typically becomes a negotiating point.
Title & Survey Cost Breakdown
Here's what you can expect to pay for title services and surveys in the DFW market:
| Service | Typical Cost | Who Pays (DFW Custom) |
|---|---|---|
| Owner's Title Insurance ($400,000 home) | $2,200 - $2,800 | Seller (negotiable) |
| Lender's Title Insurance | $300 - $600 | Buyer |
| Title Search/Exam | Included in premium | Included |
| Escrow/Closing Fee | $400 - $600 | Split or negotiable |
| Property Survey | $400 - $700 | Buyer or negotiable |
| Survey Update (existing survey) | $150 - $300 | Buyer or negotiable |
Note: These are estimates. Actual costs depend on the purchase price (title insurance is percentage-based), property complexity, and specific title company fees.
Property Surveys: What You Need to Know
A property survey is a detailed map of your property's boundaries, structures, and features. It's created by a licensed surveyor who physically measures the land and documents everything.
Why Surveys Matter
- Confirms property boundaries: Know exactly where your property starts and ends
- Identifies encroachments: Reveals if structures cross property lines
- Shows easements: Highlights areas where others have rights to use your property
- Required by lenders: Most mortgage lenders require a survey
- Protects your investment: Prevents future disputes with neighbors
Types of Surveys
Boundary Survey
The most common type for residential purchases. Shows property lines, structures, fences, and any improvements. This is what most lenders require and what you'll typically get when buying a home.
$400 - $700 in DFWALTA/NSPS Survey
A more detailed survey meeting specific national standards. Often required for commercial properties or complex residential transactions. Includes additional research into easements and encumbrances.
$1,000 - $2,500+ in DFWSurvey Update/Recertification
If the seller has a recent survey (typically less than 5-10 years old), the surveyor can update it rather than starting from scratch. They verify nothing has changed and recertify it in your name.
$150 - $300 in DFWThe Fence Line vs. Property Line Problem
One of the most common survey revelations: the fence isn't where the property line is. This happens more often than you'd think.
What Happens If the Fence Is Wrong?
- If the fence is on your property: You technically own all the land up to the property line, even if the neighbor has been using it. You may have the right to move the fence.
- If your fence is on their property: You might need to move it, or you could negotiate an easement.
- Adverse possession: In Texas, if someone openly uses land for 10+ years, they might be able to claim ownership. This is rare but worth knowing about.
Most fence line discrepancies are minor and don't affect your purchase. But if a significant structure (like a garage or addition) crosses property lines, that's a bigger issue that needs resolution before closing.
Your Title & Survey Checklist
Use this checklist to track your title and survey progress:
What If Serious Issues Are Found?
Most title issues are resolved without drama. But sometimes serious problems emerge. Here's what to know:
When to Worry
- Disputed ownership: Multiple parties claim to own the property
- Large liens: Tax liens or judgment liens that exceed the sale proceeds
- Fraud indicators: Suspicious transfers, forged documents, or identity theft
- Major encroachments: Structures that significantly cross property lines
- Unresolved estates: Property tied up in probate or inheritance disputes
Your Rights
If you have a title contingency in your contract (and you should), you can typically:
- Require the seller to resolve all title issues before closing
- Extend the closing date to allow time for resolution
- Cancel the contract and get your earnest money back if issues can't be resolved
- Negotiate a price reduction or credit for issues you're willing to accept
Don't close on a property with unresolved title issues. The short-term pressure to close isn't worth the long-term risk of ownership problems.