CAVEAT! WARNING! BEWARE! WHILE THE AUTHOR OF THE FOLLOWING (GUY C. JACKSON III) IS A LICENSED ATTORNEY, REAL ESTATE BROKER AND TITLE AGENT HE IS NOT OFFERING ANY ADVICE OF ANY SORT UPON WHICH YOU MAY RELY AND HE IS CERTAINLY NOT SOLICITING ANY OF YOUR BUSINESS, EXCEPT AS IS ALLOWED FOR HIM TO DO UNDER THE VARIOUS LAWS DEALING WITH ATTORNEYS, REAL ESTATE BROKERS AND TITLE AGENTS. HE SAYS THAT WHAT FOLLOWS IN A DISTILLATION FROM DECADES OF EXPERIENCE, SOME GOOD, SOME BAD.
 

WHAT IS TITLE INSURANCE?

There a bunch of pages to click on that have the standard consumer information about Title Insurance, why you need it and what it does. Some are from Land Title Associations and some are from our Underwriters and you are welcome to peruse them to your hearts content. But, Guy Jackson, in his usual blunt manner, says this about Title Insurance:

"Title Insurance is usually what your Lender insists on having before they will loan you money secured by a lien on real estate and the Lender gets a Mortgagee's Policy."

He also says "For the owner, an Owners Title Policy gives you the specified protection set out in it and he is not going to try to explain what the coverages are, but will happily let you read over an Owners Title Policy to your heart's content."

As brief as can be explained, Title Insurance gives insurance against certain specified potential defects in the title to your property that may exist at the time of the issuance of the policy, but generally that coverage does not extend as to things that happen in the future (although there are some expectations that he does not want to try to explain on the Internet).

In simplistic terms - "If you want to get a loan, you get and pay for a Mortgagee's Title Policy" and if you are buying land "You get an Owner's Title Policy".

HOW MUCH DOES TITLE INSURANCE COST & WHY?

The premiums for all title insurance policies and modifications thereto are set by the Texas Department of Insurance and if a Title Agency tries to reduce the premium they are guilty of giving a "rebate" and get stomped on something fierce by the Department, pay fines and/or lose their license.

You want to look at the Rate Schedule click here!

WHAT OTHER COSTS ARE THERE OTHER THAN TITLE INSURANCE?

Well, I am glad that you asked that.Let me see if I can give you as complete a list as I can:

    REAL ESTATE COMMISSIONS -If you are selling your property and have entered into a Listing Contract with a Realtor or Real Estate Broker and agreed to pay them a percentage of the sales price of the property (or whatever your agreement is), then this Commission will be deducted from your gross proceeds at the "CLOSING".In some rare instances, the Buyer has employed a Realtor or Real Estate Broker to help them find a piece of property and in those instances (usually) the Buyer will have to pay the Commission they have agreed upon.

ESCROW FEES - This is one of the most misunderstood fees involved.We try to keep ours within reason and in comparison to some other Title Agencies we know, we do. But let me give you an explanation of what makes up an Escrow Fee.

First - we have to maintain a special Escrow Account in the 4 banks in the eastern part of the County, as if they are going to loan money to a borrower who is getting their Title Policy from us, the bank prefers for their money to "stay at home" as much as possible.

We cannot draw any interest on these Escrow Accounts, without a long winded written agreement between Seller, Buyer and us and opening a separate Savings Escrow Account and paying the interest to one of the parties, usually the Buyer.

Second - each of these Escrow Accounts has to be reconciled monthly and double checked by me.

Third -each year, our CPA has to come to Anahuac and audit our Escrow Accounts, double checking them against about 50 of the files and render his certified statement to the Texas Department of Insurance as to whether we have made any mistakes.

Fourth - about every 3 years the State Department of Insurance sends out their own Auditors to rummage through our files, bank statements, bills, etc. to see if we are complying with all the Rules and Regulation, and if we are found to be in non-compliance with one of these Rules, we can "get hickied" for a slug of money by the Commissioner of Insurance.

In addition, the ESCROW FEE is sort of a catch all for the cost of preparing the checks to pay all the obligations involved and some of the minor overhead charges that cannot be allocated to a specific expense on the HUD-1 Form.

NOTARY FEES - Generally, we don't charge a Notary Fee. I think we are supposed to, but we don't.We think that our expenses for a Notary Fee is included in our Escrow Fee.

WIRE TRANSFER FEES -If we waited on the mail or messenger to bring the money in from the Lender, you would be sitting around for days twiddling your thumbs.The magic of electronic transfer of money from one bank to another allows the funds being borrowed or being paid to come into one of our Escrow Accounts by electronic means and thus shorten the time in which we get the money.

There is a fee for this service.It has to come out of our operating account and we have to charge for it on the HUD-1.

ATTORNEY FEES -Whichever attorney you select to draw the papers in order for you to buy, sell or borrow money on a piece of property is going to get paid at "CLOSING", if they get their bill into the Title Company in time.

By Rule, we are prohibited from recommending any attorney to you and can only tell you who is available locally.

You are free to choose whatever attorney you desire to do this work for you.You are under no obligation to use any attorney who has any association with our Title Company. The decision on what attorney to use for the preparation of the papers you are responsible for is left up to you.I will say that "sometimes" a lending institution will have a list of "preferred" attorneys and suggest that you might use one of them.

RECORDING FEES - When all the shouting is over with, all the papers signed, the money is passing back and forth, then the various instruments involved in the "CLOSING" have to be filed and recorded in the Office of the County Clerk.This doesn't take much time, but there are charges involved.At present the fees in Chambers County are:

First page of each instrument:$ 9.00

Each succeeding page:$ 2.00

UCC Form, Standard, 1 Debtor (local filing):$ 16.00

Each Additional Debtor:$ 5.00

UCC Form, Non-Standard, (local filing):$ 31.00

In some instances where there is personal property involved in either the purchase or loan, a UCC Form has to be filed with the Secretary of State's office in Austin and their fees are:

TAX CERTIFICATES - These are certifications from the various taxing agencies that all the current taxes have been paid.There is a cost attached to them.

The Chambers County Tax Collector handles the taxing for: City of Anahuac, City of Mont Belvieu, Anahuac ISD, East Chambers ISD, Trinity Bay Conservation District, and Chambers County Hospital District all under one Tax Certificate ($10.00 per Certificate)

The Tax Collector for the Barbers Hill ISD does their own Tax Certificates ($10.00 per Certificate).

The Tax Collector for the Goose Creek ISD does their own Tax Certificates ($10.00 per Certificate).

The Tax Collector for the City of Baytown does their own Tax Certificates ($10.00 per Certificate).

Tax Certificates are required for each tract or parcel of land involved and this cost is usually borne by the Seller/Borrower.

NOTE: These Tax Certificates are not any guarantee that the estimated taxes on them will be the actual property taxes for the year of purchase, cause those tax rates are not set until way late in the year.Only if you deal is after October 1st, can you rely on the accuracy of the estimated property taxes on a Tax Certificate.

SURVEY FEES -If it becomes a requirement that you have to have the land you are buying or which you are using as collateral for a loan surveyed, then there is a survey cost, usually borne by the Seller/Borrower.

The State Board of Insurance Rules specify that any such Surveyor has to be acceptable to the Title Company. So, before you jump off and hire a Surveyor, please check with us as to whom we have approved and whom we have not or will not approve.

FLOOD ZONE - Chambers County has a lot of low, marshy ground that is in one of the various Flood Zones according to the Federal Emergency mangement Agency (FEMA).Before you buy or build, you need to contact the Development Permit Office located in the Chambers County Road and Bridge Office located off S.H. 61 east of Anahuac at the Chambers County Airport.

Failure to check out the elevation to which you must raise the lower floor of your building, can result in all sorts of dire things happening to you. TAKE HEED!

INSPECTION FEES -Chambers County, Texas is one of the "first tier" counties that touch on the Gulf of Mexico (we have only 1 mile of beach, but that is enough to get us into the "first tier", but what is worst of all the Chambers County mile of beach has been taken over by the nudist bunch).

What being a "first tier" county means is that there are more stringent building codes applied to Chambers County buildings and if you want to get windstorm insurance you may have to have the building you are buying inspected by a state approved inspector who charges for their service.

    There are other Inspection Fees such as Termite Certificates, Windstorm Insurance Inspection Certificates; Sanitary Sewer System Inspection Fees.

MESSENGER FEES - These cover the FEDERAL EXPRESS, UPS, AIRBORNE, EXPRESS MAIL fees that are necessary to either get documents to the Title Company in time for the "CLOSING" or to get them out to the Lender so that the deal can be "funded" (we get the money from the Lender, put it in our Escrow Account, and disburse it per the instructions in the Earnest Money Contract.

DOCUMENT DELIVERY - Anahuac is sort of off the beaten path and while FED EX advertises 2:00 p.m. delivery, I can guarantee you that they can't meet that deadline and they usually get here around 4:00 p.m. and that is too late to try to "CLOSE" that day as all the papers have to be signed and filed in the County Clerk's Office before they close at 5:00 p.m.So, there has to be a lot of coordination between the Title Company - the attorneys preparing the documents - the lender - the property insurance company, etc.

OFF LOCATION CLOSING FEES -This expense is somewhat rare; but if the Seller is in California or Kansas or some other state or even within Texas and cannot come to the "CLOSING" then they can do their thing by signing the necessary papers somewhere else.HOWEVER, this signing has to be done in the office of a Title Company that has been selected by the Title Company issuing the Title Policy and the person signing the papers away from our location has to provide "photo ID" (like a driver's license) to the Title Company where they are executing the documents.

Sometimes these Title Companies do not charge any fees; but I can guarantee you that in California they will pop you from $75.00 to $150.00 for this accommodation work.This cost is the expense of the person doing the Off Location signing.

HUD-1 FORM -This is a "doozie".It is a form prescribed by the Federal Department of Housing and Urban Development that has to be completed in a certain way, that all parties to the deal have to sign.

I wouldn't attempt to try to explain a HUD-1 to you at this time, but only say that: I has to be prepared and all have to sign.

COPIES -Some copies automatically come with the Closing and are an intergrap part of the Escrow Fee; however, if there are an inordinate number of copies required, then there is a charge for them.

GOOD FUNDS - This term causes a lot of problems, especially on "table funding" (paying off everyone around the table at the end of the Closing), for the Department of Insurance has rules and regulations that tell us what "GOOD FUNDS" are, what we can accept and what we cannot accept.Below, is my best definition of what we consider to be "GOOD FUNDS":

Good Funds, as I understand it is money in our Escrow Bank Account at the time of CLOSING, whether it is by a customers check that has had time to "clear", a Certified or Cashier's Check, or Cash. We can take a moderate personal check for "closing costs", but we wait until it clears to record the instruments.

To make you feel a bit better, I am working on the Insurance Commissioner and his staff to allow us to take the major credit cards in payment of some of the Closing Costs, but I really am having a hard time with those "paper shuffling bureaucrats".

APPRAISAL DISTRICT - The Chambers County Appraisal District is where the records are kept of "who is being charged for payment of property taxes" on a particular piece of land.It is NOT conclusive proof of ownership. The place where an instrument affecting land is "notice to the world" is in the County Clerk's Office and not otherwise.

The Harris County Appraisal District handles propeties within the City of Baytown and the Goose Creek ISD.

The general information the Appraisal District has on a particular piece of property, and which is reflected on their records is:

Name and Address of Owner (really the person or entity to whom tax statements are sent),

The "Owner Number,

The "Geographical Number" of the particular parcel,

The "Parcel Number",

A "Tract Number",

The "Fair Market Value" of the Property,

The "Agricultural or Open Space Exemption" value of the Property, if appropriate,

An indication of other Exemptions applying to the property,

The value of any "Improvements" located on the property.

DESCRIPTION OF PROPERTY TO BE TRANSFERED - PLEASE, PLEASE DO NOT USE THE INFORMATION FROM THE PROPERTY TAX STATEMENT OR RECEIPT AS THE DESCRIPTION OF THE PROPERTY IN ANY DEED OR OTHER REAL ESTATE RELATED DOCUMNETS. That description is for property tax purposes ONLY and will not suffice for our Title Insurances purposes. The best way to give us the description of the property is to bring us a copy of the filed and recorded Deed. All we need is a copy and we can work from there.
 

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