What Is a Title Company and What Do They Do in Texas?

In a Texas real estate transaction, the title company works quietly behind the scenes — and then shows up front and center on closing day. If you do not know what they do, you are missing one of the most important parts of the process.

What Is a Title Company?

A title company acts as a neutral third party in a Texas real estate transaction. Its primary responsibility is to verify legal ownership of a property and ensure the title is clear — meaning no one else has claims, liens, or encumbrances that could affect the transfer of ownership. In Texas, title companies are regulated by the Texas Department of Insurance, and unlike in many other states, title insurance rates are standardized statewide, according to Texas Country Title's overview of the role title companies play in Texas real estate transactions.

What Does a Title Company Do?

According to the Texas Attorney General's office and Texas Country Title, a Texas title company performs several key functions in every transaction:

• Title search: The title company researches the legal history of the property to identify any existing liens, unpaid taxes, easements, encumbrances, or ownership disputes that could affect the buyer's title.
• Title insurance: Once the title is confirmed clear, the title company issues two policies — an Owner's Policy that protects the buyer's investment from future title-related issues, and a Lender's Policy required by the mortgage lender. In Texas, it is customary for the seller to pay for the Owner's Title Policy.
• Escrow services: The title company acts as the neutral escrow agent, collecting and holding earnest money, option fees, and loan proceeds, then disbursing funds at closing once all conditions are met.
• Closing coordination: The title company coordinates the final closing, prepares the closing disclosure, manages document signing, and ensures the deed is properly recorded with the county.

What About the Survey?

While the title company does not typically order the property survey itself, it does review the survey to verify that the legal description of the property matches what is physically on the ground and to identify any easements, encroachments, or boundary issues that need to be addressed before closing. A standard residential boundary survey in Texas typically costs $400 to $800, per LRG Realty's buyer guide, with most surveys taking one to three weeks to complete. Most lenders require a current survey before funding a loan.

Texas Wet Funding: What It Means for You

Texas uses a wet funding model for most transactions, meaning funds are disbursed on the actual day of closing — not days later as in some other states. This means you receive your keys the same day you sign. Buyers should wire their closing funds to the title company at least one business day before the scheduled closing date, as personal checks over $1,000 are typically not accepted at most Texas title companies.

Can You Choose Your Own Title Company in Texas?

Yes. Buyers and sellers in Texas are entitled to choose their own title company — something worth considering if you want control over the process. Real estate agents often recommend title companies they trust, but the choice is yours. In Texas, buyers should also be aware that the Texas Attorney General cautions against trusting any seller or agent who suggests avoiding a title company. Scam artists have misrepresented themselves as free-and-clear property owners and sold homes with large tax liens to unsuspecting buyers without title searches.

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