How to Read a Title Report in Texas Real Estate

Introduction

When buying a home in Texas, you'll receive a title report that may seem overwhelming at first glance. This comprehensive document contains crucial information about your property's history and any issues that could affect your ownership. Learning to read and understand your title report helps you identify potential problems early and make informed decisions about your purchase.

What Is a Title Report?

A title report is a detailed document prepared by a title company that shows everything found during the title search. It reveals the property's ownership history, current liens, easements, restrictions, and any issues that need resolution before closing.

A title report typically includes:

• Property description and legal description
• Chain of title (ownership history)
• Current liens and encumbrances
• Easements and restrictions
• Property taxes and assessments
• Exceptions to title insurance coverage
• Requirements for clearing title issues

This report helps you understand exactly what you're buying and what rights or limitations come with the property.

Why Reading Title Reports Matters in Texas Real Estate

Texas has unique property laws and a complex history that makes understanding title reports especially important. The state's rapid development, mineral rights laws, and homestead protections create specific considerations you'll see in title reports.

Texas-specific elements in title reports include:

• Mineral Rights Reservations: Texas properties often have separate mineral rights ownership that must be clearly documented.
• Homestead Protections: Texas homestead laws create specific protections that appear in title reports.
• Community Property: Texas community property laws affect how ownership is shown for married couples.
• Water Rights: Texas water rights can be complex and must be properly documented in title reports.
• Oil and Gas Leases: Historical leases may appear in title reports and affect your property rights.

Without understanding your title report, you might miss important information about easements, restrictions, or ownership issues that could affect your property use or value.

How to Read a Title Report (Step-by-Step)

Understanding each section of your title report helps you identify important information. Here's how to read a title report step-by-step:

Section 1: Property Description

This section shows the property's legal description, address, and lot information. Verify this matches the property you're buying.

Section 2: Current Owner

Shows who currently owns the property. Verify the seller's name matches the contract and that they have legal authority to sell.

Section 3: Chain of Title

Lists the property's ownership history, showing how title passed from owner to owner. Look for gaps, unusual transfers, or potential issues in the chain.

Section 4: Liens and Encumbrances

Lists all liens against the property, including:

• Mortgages and deeds of trust
• Tax liens
• Judgment liens
• Mechanic's liens
• HOA liens

All liens must be paid off or released before closing.

Section 5: Easements and Restrictions

Shows easements allowing others to use part of your property and restrictions limiting how you can use it. Common examples include utility easements, access easements, and deed restrictions.

Section 6: Exceptions to Coverage

Lists items that won't be covered by title insurance, such as:

• Survey matters
• Unrecorded easements
• Mineral rights
• Certain restrictions

Review these carefully to understand what's not protected.

Section 7: Requirements

Lists items that must be resolved before closing, such as paying off liens, obtaining releases, or clearing title issues.

Texas Example or Scenario

Let's say you're buying a $450,000 home in Plano. Here's what you might see in your title report:

The title report shows:

• Current Owner: John and Jane Smith (married, community property)
• Chain of Title: Property transferred from ABC Development in 2010, then to the Smiths in 2015
• Liens: Current mortgage of $320,000 (will be paid off at closing), property taxes current
• Easements: Utility easement along the rear property line (standard, no issue)
• Restrictions: Subdivision restrictions limiting fence height to 6 feet
• Exceptions: Mineral rights reserved to previous owner (common in Texas)
• Requirements: Seller must provide payoff statement for mortgage

In this scenario, everything looks good. The mortgage will be paid off, taxes are current, and the easements and restrictions are standard. The mineral rights exception is normal in Texas and won't affect your surface ownership.

However, if the report showed a $25,000 mechanic's lien or an unexpected easement allowing neighbors to drive through your property, you'd want to address these issues before closing.

Common Issues or Misconceptions

Many buyers misunderstand title reports. Here are common misconceptions:

• "A clean title report means no issues" - Title reports show known issues, but some problems may be hidden, which is why title insurance is important.
• "All liens must be paid before I can buy" - Liens are typically paid off at closing using proceeds from the sale.
• "Easements mean I can't use my property" - Easements usually allow specific uses (like utilities) and don't prevent normal property use.
• "Exceptions mean I can't get title insurance" - Exceptions are standard and define what's not covered, not what prevents coverage.
• "I need to understand every legal term" - Your title company and real estate agent can explain any confusing sections.
• "Title reports are the same as title insurance" - Reports show what was found; insurance protects against what wasn't found.

Understanding these points helps you interpret your title report correctly.

Checklist / Guide / Document

Before closing, review our Homebuyer Closing Checklist to ensure you're prepared. Our Title Insurance Guide explains how title insurance works with title reports.

For detailed information about the closing process, download our Closing Day Guide. These resources help you understand every step of your transaction.

How True North Title & Escrow Helps

At True North Title & Escrow, we provide clear, easy-to-understand title reports throughout Texas. Our experienced team explains every section and answers your questions.

We offer:

• Comprehensive title searches and reports
• Clear explanations of all findings
• Identification and resolution of title issues
• Expert guidance on Texas property law
• Coordination with lenders and real estate agents
• Transparent communication about any concerns

Our title insurance services work alongside title reports to provide complete protection. We also provide title search services and real estate settlement services for smooth closings.

Local Expertise Across Texas

We serve buyers and sellers across Texas with local expertise. Our team understands regional differences in property records and title requirements.

We provide title report services in:

• Dallas - Complex urban property histories
• Fort Worth - Historic properties and new developments
• Plano - Growing suburbs with diverse property types

No matter where you're buying or selling in Texas, we're here to help.