Title Policy and Survey – 3 Important Strategies to Help You Close the Contract in Your Favor

It is amazing how little attention to detail buyers and their real estate agents pay to the “residential contract” which of course is the most important document in all of the paper work associated with buying a home. This article will discuss three important strategies that you as a buyer and your agent should know and act upon before completing and executing the contract in Prosper, Plano, McKinney and Frisco Texas. 

 One strategy significantly reduces closing costs and the other two strategies will help insure you against potential law suits with regard to shortages in area or boundary lines, encroachments, protrusions and overlapping improvements.

First let’s discuss the money saving potential with regard to the title policy.  This closing cost is usually one of the most significant. In cities like Prosper, Plano, Frisco and McKinney TX where we do most of our transactions we find that this closing cost especially on new home construction is charged to the buyer.  This usually amounts to about 1% of Remington R35WH1 Rem 35whelen 200gr PSP 20/200 the price of the home or about $3000 on a $300,000 home.

 Builders are notorious for sneaking this title insurance premium into the closing costs for the buyer.  For an unseasoned buyer or agent this title insurance expense may appear to be just one of those items that have to be paid at closing much likehomeowners insurance, appraisal fee or attorney’s fees.   But guess what?  This is a very negotiable item and one that your real estate agent should insist that the seller or builder pay.  Do not assume you have to bear this cost. Failing that, my suggestion is to split it 50/50.

Second is the survey.   We at Remington Realty Group recommend to our buyers that they go ahead and pay for a new survey. They generally cost about $500. However, if the old survey is available from the seller that money can be saved but then an affidavit must be signed and notarized by the seller which says that no additions, garage conversions, out buildings etc. have been added to the property since the date of the existing survey.  On acreage purchases one should definitely buy a new survey!  Old land surveys were inaccurate for the most part because of  crude measuring tools and techniques.

Third is what is called a “survey deletion clause” which is found in the contract itself.  This clause should be removed from the contract so that the buyer will have title insurance that protects him in matters of discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions or overlapping improvements.

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All the buyer or agent has to do is tell the title company to remove the survey deletion clause.  This additional protection to the buyer will generally cost about 5% of the normal title insurance cost.  So, if the policy is $3000, it will increase by $150…a small amount for avoiding a potentially huge issue with a neighbor or the municipality.  And, hopefully at no cost to you the buyer because you had already successfully negotiated the title insurance to be paid by the seller or builder.

In conclusion, negotiate the title insurance premium, buy a new survey and remove the survey deletion clause from the contract...all in your favor as a buyer. To learn more,

Bill Remington