What You Need to Know About Title Insurance

Posted by James Brinkman on Wednesday, December 3rd, 2008 at 6:59pm.

When you are selling a home in Texas, you will need to be aware of Title Insurance and how it affects you.  In the state of Texas, the sale of title insurance is regulated.  As a result, the premiums of this insurance are determined by the sale price of the property.  This means title companies cannot discount the premium cost.  Although many sellers are upset by the need to purchase Title Insurance, mostly because they feel it benefits only the buyer, it is actually beneficial for you to have this insurance in place as well.

Having Title Insurance in place helps to protect you from legal issues that may arise when you sell your home.  By having the insurance in place, you can enjoy peace of mind in knowing that you are protected.  To better understand how the insurance can protect you, it is helpful to better understand Texas real estate law.

According to the state of Texas, a transfer of real estate is made completed with the transfer of a deed.  There are many different deeds that fall within this category. They include:

•    General deeds
•    Quit claim deeds
•    Special warranty deeds

If you are selling your home, you are required to give the buyer a “general warranty deed” as part of your contract.  The general warranty deed is meant to act as a warranty to the buyer regarding the condition of the home.  More specifically, if problems with the title arise down the road when the buyer attempts to sell the home, he or she will have the right to sue you for breach of warranty.

When you have Title Insurance in place, your risks are clearly defined when it comes to the warranty of title.  In addition, you are properly covered if a problem does arise.  Since the warranty period dates back all the way to the Texas land grants that took place in the 1840’s, you certainly want to be certain you are protected!

So, while Title insurance does benefit the buyer, it is definitely good for the seller as well.  After all, you don’t want to have any problems sneak up on you years after you thought you had put the sale behind you.  Although you might not appreciate having an added expense, just look at it as one more step toward enjoying a successful sale.

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