Closing a Real Estate Transaction

In the event that real estate is to be transferred, a prudent and experienced buyer will want to confirm the ownership, and a determination of what recorded documents may affect the intended use of the property. There may be restrictive covenants that control use, mineral rights held by another party who may want to extract them, easements that allow someone the use of part of your property, and even the right for another party to match your offer and force you out of the purchase. And lastly, does the current owner have a loan that must be paid and released when you become the new owner?

For a lender, they will want to confirm that the borrower is the owner or will become the owner at the time of purchase. They will also want to make sure that their loan has priority over the rights of any other party, unless they are comfortable that those rights do not threaten the lien that secures the lender’s promissory note.

In both cases the parties will look to a title company to research the real property records at the county courthouse or at a title plant that has a duplicate of the records stored at the county courthouse. A modern title company will usually have these records in a computerized version that allows a quick and accurate retrieval so that they can be read by a title examiner. The summary of the examiners research is put into a title commitment along with any requirements that are needed to complete a transfer or establish a mortgage. This commitment is circulated to all of the parties to a transaction for their review.

The escrow services provided by a title company include the receipt and distribution of copies of the contract, a review of the title commitment (which may include helping the parties resolve title defects or questions), collecting and getting signed the documents needed for the transaction, distributing closing statements that reflect all of the costs to each side, collecting the money needed for the transaction and then paying all of the people involved, and finally getting the appropriate documents recorded at the courthouse. The escrow agent must be able to coordinate the efforts of the buyer, seller, realtors, surveyors, attorneys, lenders and any other principals to the transaction.

Upon the completion of all of the above, the title company will issue a policy of title insurance. This policy will reflect that the interests of the owner or lender are subject only to the matters that have been disclosed. Should there be an unknown issue or overlooked recorded document that creates a problem, then the title company will defend in court or reimburse the loss from this oversight.

The premium for title insurance policy, the form of the title commitment and the form of the title policy itself are on forms promulgated by the State of Texas. In an industry where costs and forms are identical, only service and accuracy can distinguish one company from its competition. Texas Investors Title performs at the highest levels of service in both title and escrow.