Buying a home is the largest investment most people ever make.1 In Texas, ensuring that investment is legally yours is the job of title insurance.2 Unlike other insurance that protects against future events (like a fire), title insurance protects you against past events that could threaten your ownership.3
What is a Title “Defect”?
Before closing, our team performs an exhaustive search of public records to ensure the seller has the legal right to transfer the property.4 However, even the best search can miss “hidden” hazards, such as:
- Forgeries: Someone previously forged a signature on a deed.
- Unknown Heirs: A long-lost relative of a previous owner surfacing to claim the property.5
- Clerical Errors: Mistakes in public records or indexing.6
- Unpaid Liens: Undisclosed tax liens or contractor liens from years ago.
The Two Types of Policies
- Owner’s Policy: This protects you, the buyer, for as long as you or your heirs own the property. In Texas, the seller traditionally pays for this, though it is negotiable.
- Lender’s Policy: This protects the bank’s investment. If you are getting a mortgage, this is almost always required.
The Texas Difference: Title insurance rates in Texas are “promulgated,” meaning they are set by the Texas Department of Insurance.7 You won’t find a “cheaper” rate elsewhere, so your choice should be based on service, speed, and expertise.
2. Appraisal vs. Inspection: Why You Need Both and How They Differ
It is common for buyers to confuse the home inspection with the appraisal. While both involve a professional visiting the property, their goals are entirely different.
The Comparison Table
| Feature | Home Inspection | Home Appraisal |
| Primary Goal | To identify the condition of the home. | To determine the fair market value. |
| Who it’s for | The Buyer. | The Lender. |
| What they look at | Roof, HVAC, plumbing, electrical, foundation. | Comparable sales, location, square footage, upgrades. |
| Is it required? | Highly recommended, but optional. | Required by most mortgage lenders. |
Why You Need Both
Think of it this way: The inspector tells you if the house is “broken” and needs repairs. The appraiser tells the bank if the house is “worth the price” you are paying.8 If a house is in perfect condition but overpriced, the appraisal catches it. If a house is a great price but the foundation is cracking, the inspection catches it.
3. Texas Homestead Exemptions: How to Save Money on Your Property Taxes
Texas is known for having no state income tax, but our property taxes can be high. The Texas Homestead Exemption is the single most effective tool for lowering your annual tax bill.
How It Works
A homestead exemption removes a portion of your property’s value from taxation. For example, if your home is valued at $300,000 and you have a $100,000 exemption for school taxes, you only pay school taxes as if your home were worth $200,000.
The Benefits
- School Tax Savings: A mandatory $100,000 residence homestead exemption for public school taxes.
- The “Exemption Cap”: This is the most valuable part. Once you have your exemption, the appraised value of your home for tax purposes cannot increase by more than 10% per year, regardless of how much the market explodes.
How to Apply
You must own and occupy the home as your principal residence on January 1st. Applications are free and can be filed through your local County Appraisal District (CAD) between January 1 and April 30.
4. A Buyer’s Guide to Closing Costs: No Surprises at the Finish Line
“Sticker shock” is a real thing at the closing table. Beyond your down payment, “closing costs” typically range from 2% to 5% of the home’s purchase price.
Breaking Down the Costs
- Lender Fees: Application fees, origination charges, and credit report fees.
- Title & Settlement Fees: This covers the title search, the insurance policies, and the escrow fee (the cost of the person sitting with you to sign the papers).
- Government Fees: Recording fees to the county and transfer taxes.
- Pre-paid Items: Lenders often require you to “pre-pay” several months of homeowners insurance and property taxes into an escrow account.
Expert Tip: Always review your Closing Disclosure (CD) at least three days before your appointment. If you see a fee you don’t understand, ask us! We believe in 100% transparency.
5. What is Survey Deletion Coverage? The Endorsement Texas Buyers Need
In Texas, the standard title policy contains an exception for “Area and Boundaries.” This means the title company isn’t liable for discrepancies in the size of the lot or boundary disputes. Survey Deletion Coverage (often called the “T-19.1 Endorsement”) removes this exception.
Why Care About This?
Imagine you buy a house and, a year later, your neighbor builds a fence, claiming three feet of your yard is actually theirs. Or, you discover your garage is accidentally built two feet over the property line.
- Without Coverage: You are on your own to handle the legal dispute.
- With Coverage: Your title policy may cover the legal costs or the loss in value associated with these boundary issues.
The Cost
In Texas, for a residential property, the cost is usually quite low—typically 5% to 15% of the basic premium. For a few hundred dollars, it provides massive peace of mind against one of the most common neighborhood disputes.
How We Can Help
At Clear Title & Appraisal Co., we don’t just process paperwork; we protect your future. Whether you are navigating your first appraisal or filing your homestead exemption, our team is here to ensure your path to the finish line is clear.