You have a lot riding on closing day. Between wiring funds, signing stacks of documents, and timing a move, it is easy to gloss over the one line item that protects your ownership for years: title insurance. If you are buying or selling in Houston, understanding how title insurance works can help you avoid surprises and protect your investment. In this guide, you will learn what title insurance covers, how policies differ, who usually pays in Texas, what to expect at a Houston closing, and smart steps to take before you sign. Let’s dive in.
What title insurance covers
Title insurance protects you from financial loss caused by defects in the recorded history of a property. That can include liens, judgments, unpaid taxes, undisclosed heirs, forged documents, or clerical errors that affect ownership.
Just as important, here is what it does not cover. It does not insure the physical condition of the home, zoning or building code compliance, or flood or other hazard damage. Flood coverage is separate. Title policies are retrospective. They cover past defects that existed before your policy date and are found after you buy.
Two policies you may see
Owner’s policy
An owner’s policy protects your ownership interest, typically up to the purchase price. It is optional, but widely recommended because it protects your equity if a covered defect surfaces later.
Lender’s policy
A lender’s policy protects the lender’s security interest up to the loan amount. If you finance your purchase, your lender will usually require this policy. It protects the lender, not you.
When coverage starts and how long it lasts
You pay the title premium once at closing. Coverage lasts as long as the insured party has an interest in the property. The title company issues a title commitment before closing and the final policy after documents are recorded with the county. That delivery typically takes days to a few weeks.
Why Texas pricing is unique
In Texas, the Department of Insurance regulates title insurance rates and many policy forms. That means the base premium is set by statewide schedules. You may also see separate charges at closing for endorsements, title company escrow or closing services, and recording. For exact current rates, check with your title company.
How the title search works in Houston
The title search
The title company reviews public records to build the chain of title and flag issues. They look at deeds, liens, easements, plats, restrictions, probate matters, and pending lawsuits. In practice, the search often spans many decades to confirm an unbroken chain.
The title commitment
Before closing, you will receive a Commitment for Title Insurance. It includes:
- Schedule A: who is insured, property description, and policy amounts.
- Schedule B: requirements that must be met before the policy is issued, such as paying off existing liens or delivering affidavits.
- Schedule C: exceptions that will not be covered by the policy, such as recorded easements or certain restrictions.
Review the commitment closely. Some exceptions can be removed if cured. Others are permanent and will remain in your final policy.
Exceptions to watch
Pay close attention to easements, use restrictions, and any unresolved liens. Ask which exceptions can be cleared before closing and which are standard, permanent matters that run with the land.
Common Houston and Harris County issues
Every property is unique, but in our area you often see:
- Unreleased mortgages, tax liens, or contractor liens.
- Judgment or child support liens that attach to an owner.
- Breaks in the chain of title or forged or ambiguous conveyances.
- Easements and rights-of-way for utilities or flood control that affect use.
- Mineral rights reserved or severed by prior owners. Mineral estate issues are common in Texas and can influence value and use.
- Platting or subdivision compliance issues, and boundary questions if the survey is outdated or missing.
- Recent unrecorded transfers that create a gap between the search date and recording.
When issues arise, the title company typically works to clear required items before closing. Some problems need legal action to resolve. If they cannot be cured, the underwriter may exclude them, add conditions, or decline to insure.
Endorsements and surveys
Common endorsements in Texas
An endorsement is a one-time add-on that modifies your policy to cover a specific risk. In Houston, common choices include:
- Survey-related coverage if you provide a current survey.
- Access or zoning endorsements for specific property needs.
- Mechanic’s lien or construction-related protections when recent work was done.
- Lender endorsements for mortgage terms like future advances.
Availability and pricing depend on the underwriter and the facts of your property.
Why surveys matter here
A current survey can help remove standard survey exceptions and clarify boundaries, encroachments, and easements. In Houston, drainage and utility easements and floodplain considerations are common. A recent survey is often worth obtaining even if not strictly required by law.
Mineral rights basics
In Texas, mineral rights can be severed from the surface and owned separately. Your title commitment should show recorded mineral reservations or leases. Owner’s policies insure what the public record reflects, and recorded mineral reservations are typically excluded unless cleared or specially insured. If mineral history is complex, consider legal advice.
Costs and who pays in Houston
What shows up on your Closing Disclosure
Title-related costs usually include:
- The one-time premium for owner’s and lender’s policies.
- Fees for endorsements, if any.
- Title company escrow or closing fees.
- Recording fees paid to the Harris County Clerk for deeds and mortgages.
- Payoff and release processing to clear liens if needed.
Customary payment in Texas
In most Texas transactions, including Houston, the seller often pays the owner’s policy premium and the buyer pays the lender’s policy. This is a long-standing custom, but it is negotiable and should be spelled out in your purchase contract.
How much to budget
Premiums are based on regulated Texas rate schedules tied to the policy amount. Endorsements and closing services are separate. As a planning guide, title costs are a one-time item that can range from a few hundred dollars on lower-priced properties to several thousand on higher-priced homes. For exact figures, ask your title company for a quote.
Closing day in Houston
What to bring
Arrive with a valid photo ID, your wiring instructions or certified funds as directed by the title company, and be ready to sign deed or loan documents. Sellers typically sign the deed and any required affidavits. Buyers sign loan and ownership documents.
What happens after you sign
After closing, the title company records the deed and, if applicable, the deed of trust with the Harris County Clerk. Recording creates public notice of your ownership. The final owner’s and lender’s policies are issued after recording and any post-closing items are completed, usually within days to a few weeks.
Smart steps before you close
- Read your title commitment. Focus on Schedules A, B, and C.
- Ask which Schedule C exceptions can be removed and what it takes to clear them.
- Order a current survey if your property has easements, additions, or boundary questions.
- Clarify any mineral reservations or leases shown in the record.
- Discuss endorsements that fit your property and loan with the title company and your lender.
- Confirm payoff amounts and lien releases well before closing.
- Follow secure wiring instructions and verify by phone with known contacts.
- Keep your final policy in a safe place once issued.
The bottom line for Houston buyers and sellers
Title insurance is one of the most important protections you purchase at closing, yet it is also one of the most misunderstood. When you know the difference between owner’s and lender’s policies, how Texas pricing works, what exceptions mean, and which endorsements matter, you can move through closing with confidence.
If you are planning a sale or purchase in West University, River Oaks, Southampton, Braes Heights, or anywhere in Houston’s inner loop, let’s make your closing smooth and predictable. For clear guidance from contract to keys, connect with Gayle G. Kennedy.
FAQs
What does an owner’s title policy cover in Houston?
- It protects your ownership interest against covered title defects rooted in the public record, up to the policy amount, for as long as you own the property.
Do I need owner’s title insurance if my lender has a policy?
- Yes, if you want your equity protected. A lender’s policy protects the lender’s interest only, not yours.
Who usually pays for title insurance in Texas closings?
- Customarily, the seller pays the owner’s policy and the buyer pays the lender’s policy, but this is negotiable and should be stated in the contract.
How long until I receive my final title policy in Harris County?
- The title commitment often arrives within days before closing. Final policies are issued after recording, usually within days to a few weeks.
What are Schedule C exceptions on my title commitment?
- They are matters not covered by the policy unless cleared, such as liens, certain easements, or restrictions. Some can be cured before closing; others are permanent.
Will title insurance cover flood or zoning issues in Houston?
- No. Flood insurance is separate, and zoning or code matters are typically not covered. Some limited endorsements exist, but they are not blanket coverage.
How do mineral rights affect my Houston purchase?
- Texas allows mineral and surface estates to be separate. Recorded mineral reservations are usually exceptions in the policy unless cleared or specially insured. Consider legal advice if the history is complex.
