When the Purchase Offer has been accepted and signed by all parties and the seller and buyer have copies, (or their agents) the contract becomes binding on all parties (buyers and sellers). The effective date is filled in by one of the brokers or brokers’ agents in Paragraph 24 of the contract.  The purchase contract, and Earnest Money Check, will be delivered to the title company that was agreed to in the contract and the Option Fee Check will be delivered to the seller’s agent.  The agent should get receipts and give copies of those receipts to the buyers or buyers agent as soon as the checks have been delivered to the proper recipients.

The Earnest Money and the Option Fee Checks must go to the Title Company within 3 calendar days of the effective date of the contract (even if there is a holiday or hurricane) or the buyer might be in default.

A Title Company will handle the following items.  (Paragraph 6 of the Contract)

Earnest Money – Must be in funds that are acceptable to the Title Company.  A cashier’s check  or a wire are usually acceptable. For questions about methods of payment, contact the Title Company.  For cash purchase or investment property, the Title Company may require a cashier’s check.  An agreement to convey starts the process once it is received at the Title Company.  If the last day to deliver the earnest money, Option Fee, or the additional earnest money falls on a Saturday, Sunday, or legal holiday, the time to deliver the earnest money, Option Fee, or the additional earnest money, as applicable, is extended until the end of the next day that is not a Saturday, Sunday, or legal holiday.  Once you submit the loan application, it is usually subject to a credit check, an appraisal, and sometimes, a survey of the property.

Check Taxes Owed – What taxes are owed on the property?  The Title Company contacts the various assessor-collectors.

Title Search – Copies of documents are gathered from various public records: deeds, deeds of trust, various assessments and matters of probate, heirs, divorce, and bankruptcy are addressed.

Restrictive Covenants, Building Permits,

Examination – Verification of the legal owner and debts owed.

Survey – Check with your escrow agent, and lender, to make sure that the existing survey is acceptable, if one exists.  Check to make sure that your escrow agent will order a new survey, if needed.  If there is an existing survey, get the T-47 form completed and notarized by the seller and give this to the Title Company and Lender as soon as you receive it.  You can have a new survey done, even if one already exists.  A new survey should be done if there have been additions or modifications to the property like a swimming pool or additional building, patio, driveway, fence, or any other structure of modification that might create a problem with the survey.

Document Preparation – Appropriate forms are prepared for conveyance and settlement.  You should get a preliminary HUD-1 after the Title Company has all of the information, from the agent, contract, seller, Taxing Authorities, HOA, or Condominium Association that it needs to prepare one.

Title Commitment is issued prior to closing for review an notification of items that will be excluded from the Title Insurance Policy.

Settlement – An Escrow Officer oversees the closing of the transaction: seller signs the deed, you sign a new mortgage, the old loan is paid off and the new loan is established.  Seller, agents, attorneys, surveyors, Title Company, and other service providers for the parties are paid.  Title insurance policies will then be issued to you and your lender.

Title Insurance Policy- There are two types of title insurance:

• • Coverage that protects the lender for the amount of the mortgage,
  • Coverage that protects the buyer of the property. Schedule B – Items listed on Schedule B are not covered by the title insurance policy.Texas Department of Insurance – Title Insurance InformationSchedule C – Clear to Close – Items on Schedule C of the title commitment that need to be cleared up before the title insurance can be issued.Title Commitment – Read Paragraph 6B of the contract – Title Commitment should be delivered to the buyer within 20 days after the Title Company receives a copy of contract. Read the Commitment and pay particular attention to Schedules B and C. Review with your real estate attorney, if you have any questions.

• Title agents search public records to determine who has owned any piece of property, but these records may not reflect irregularities that are almost impossible to find. Title insurance protects the lender and borrower in cases where some irregularity turns up at a later date, after the purchase. Title searches go back to the earliest public records, not all of which were recorded.

• Pay special attention to Schedule B of the policy, which explains any limitations, exclusions, exceptions, and special conditions. You might want to discuss these exceptions with an attorney before you close on a real estate deal
• Schedule C – Clear to Close – Items on Schedule C of the title commitment that need to be cleared up before the title insurance can be issued.Title agents search public records to determine who has owned any piece of property, but these records may not reflect irregularities that are almost impossible to find.  Title insurance protects the lender and borrower in cases where some irregularity turns up at a later date, after the purchase.  Title searches go back to the earliest public records, not all of which were recorded.Title Commitment – Read Paragraph 6B of the contract – Title Commitment should be delivered to the buyer within 20 days after the Title Company receives a copy of contract.  Read the Commitment and pay particular attention to Schedules B and C.  Review with your real estate attorney, if you have any questions.

The Title Company schedules the closing after all parties are ready and the lender has approved the loan. They also handle the closing process which includes signing of documents and receiving and paying funds to the parties. The Title Company may also hold the keys to the property until funding is completed.