Title Insurance in Texas: A McKinney Buyer’s Guide

Buying a home in McKinney is exciting, but the paperwork can feel like a maze. One document that deserves your full attention is the title commitment and the title insurance that follows. If you understand what title insurance covers, who usually pays in Collin County, and how to read the commitment, you can move to closing with confidence.

In this guide, you’ll learn Texas basics, local payment customs, how rates work, and the exact places to focus when your title commitment arrives. Let’s dive in.

Title insurance basics in Texas

Title insurance protects you from covered losses tied to past defects in the property’s title that were unknown when the policy issued. Think undisclosed liens, errors in deeds, forged signatures, or missing heirs. You pay a one-time premium at closing, and the owner’s policy lasts as long as you hold an interest in the property. A lender’s policy lasts until the loan is paid off.

There are two separate policies:

• Owner’s policy. Protects your equity in the home.
• Lender’s policy. Protects the mortgage lender for the loan amount.

Having a lender’s policy does not protect you as the owner. If you want protection for your ownership, you need an owner’s policy in your name.

Typical owner coverage focuses on pre-existing title defects that affect ownership. Common exclusions include issues you create after the policy date, certain government-related restrictions unless endorsed, some unrecorded easements or rights of parties in possession, and zoning or permitting issues unless you buy specific endorsements.

If a covered issue pops up after closing, you notify the title company. They will defend your title and, if needed, pay for covered losses up to the policy limit, subject to the policy’s terms and exclusions.

Texas adds two helpful context points. Mineral rights are frequently reserved or severed in our state, which can affect surface use. Texas is also a community property state, so marital rights and vesting can be relevant to how title is held.

Who usually pays in McKinney

Texas does not set a statewide rule for who pays for title policies. It is decided by local custom and, more importantly, by your contract. In much of the Dallas–Fort Worth market, including Collin County, the seller commonly pays for the owner’s policy. The buyer usually pays for the lender’s policy and other loan-related costs.

Customs can shift with market conditions. In a hot seller’s market, sellers may resist paying for the owner’s policy. In a more balanced or buyer-friendly market, sellers often cover more closing costs. Do not assume. Always confirm in writing.

Most resale purchases use the TREC One to Four Family Residential Contract or another promulgated form. These forms include paragraphs that spell out who pays for the owner’s and lender’s policies and how the title company is selected. Read those paragraphs carefully and make sure they match your agreement.

Rates and costs in Texas

Texas title insurance premiums are promulgated. That means the Texas Department of Insurance sets and approves the base premium schedules. As a result, you will see far less price variance on base premiums from one title company to another than you might in other states.

Here is how pricing typically works:

• Owner’s policy premium is based on the purchase price or insured amount. It is a one-time charge at closing.
• Lender’s policy premium is based on the loan amount.
• Simultaneous issue discounts may apply when both policies are issued at the same time. This can lower the combined cost.
• Reissue rates or credits may be available if a recent title policy exists for the property.
• Endorsements are optional add-ons that expand coverage, such as survey coverage, access, restrictive covenant enforcement, or certain zoning protections. These carry additional, usually modest, fees.
• Non-premium closing costs are separate from the title premium. These include recording fees, escrow or settlement fees, courier or handling, and third-party items like surveys or HOA estoppels. These vary locally.

Who pays which cost depends on your contract and local practice. The common pattern in Collin County is seller pays the owner’s policy, while the buyer pays the lender’s policy and loan costs. Other items, like recording fees or prorations, are split as the contract directs.

Because base rates are regulated, shop for service and responsiveness. Ask for a written estimate that shows premiums, endorsements, and closing fees. Confirm any simultaneous issue or reissue credits you might qualify for.

What a title commitment is

A title commitment is the title company’s written promise to issue a title policy after certain conditions are met. You receive it before closing. It lists what will be covered, what must be resolved before the policy is issued, and the exceptions that will remain in your policy unless removed.

Most commitments follow a standard format with three key sections:

• Schedule A. The who, what, and where. This lists the proposed insured parties, the type of interest to be insured, the policy amounts, and the legal description.
• Schedule B – Part I (Requirements). Items that must be completed or cleared before the policy will issue, such as lien payoffs, releases, affidavits, or court documents.
• Schedule B – Part II (Exceptions). Items that will not be covered by your policy unless removed. These often include easements, covenants, mineral reservations, survey exceptions, and unpaid taxes.

You should read the commitment as soon as you receive it and ask for copies of any recorded documents referenced in Schedule B.

How to read your commitment like a pro

Here is a practical walkthrough of where to focus and what to confirm.

Schedule A: names and legal

• Confirm the buyer names and how you want to hold title. Vesting language affects ownership, estate planning, and sometimes taxes.
• Check the policy amounts for the owner’s and lender’s coverage if applicable.
• Verify that the legal description matches the contract and, if available, the survey.

Schedule B – Requirements: what must be cleared

• Look for mortgage payoffs, liens, judgments, and required affidavits. These are the seller’s to-do items in most transactions and must be resolved before closing.
• Flag anything that could take time, such as probate-related documents or complex releases. Ask for status updates early.

Schedule B – Exceptions: what will not be covered

Read every exception. Common items in McKinney include:

• General exceptions, such as rights of parties in possession and matters a current survey would show.
• Easements and rights of way for utilities or access. Confirm location and impact on future plans.
• Covenants, conditions, and restrictions for your subdivision or community. Review use restrictions and architectural guidelines.
• Mineral reservations or severed mineral interests. These are common in Texas and can affect surface use.
• Unpaid property taxes or special assessments.
• Survey-related exceptions. If no current survey is provided, the policy may exclude matters a survey would reveal.

Some exceptions can be removed or limited. For example, a recorded lien can be released, or a survey exception may be reduced with a new survey and the right endorsement if the underwriter approves. Others, like recorded easements or valid mineral reservations, typically remain unless a recorded extinguishment exists.

McKinney buyer checklist and timeline

Use this checklist to stay on track from offer to closing.

Before you write an offer

• Ask whether the seller intends to pay for the owner’s policy. This is common locally, but confirm.
• Clarify how the title company will be selected and which party pays which fees. Check the contract paragraph that covers title and escrow.
• Note any HOA or deed restriction details in the listing that might show up in the title commitment.

After your contract is executed

• Get the title commitment promptly. Your contract includes deadlines for delivery and review. Read it right away.
• Review Schedule A for correct names, policy amounts, and legal description. Fix vesting early if needed.
• Work through Schedule B – Requirements. Track payoffs, releases, and affidavits with your agent and title officer.
• Scrutinize Schedule B – Exceptions. Decide which items you accept as normal and which need clarification, removal, or endorsements.
• Order a current survey if your lender or underwriter requires it, or if you want stronger survey coverage.
• Request HOA or POA documents and estoppels to confirm assessments, violations, or pending litigation.
• Verify property tax status with the county so you know whether any prior taxes or special assessments are unpaid.
• Discuss endorsements with your title officer and lender. Ask which endorsements are recommended for this property and why.
• Request a preliminary closing statement showing premiums, endorsements, and all estimated closing costs. Confirm who pays for each line item per the contract.

Questions to ask your title officer

• Which exceptions will remain in my owner’s policy? Can any be removed or insured over with endorsements?
• Are there recorded mineral reservations in the chain of title? What might they mean for surface use?
• Are there unpaid taxes, special assessments, or recent liens?
• Should I obtain a current survey to reduce the survey exception? Does the underwriter require it?
• Which endorsements do you recommend for this property and what do they cost?
• What are the estimated owner and lender premiums, and do simultaneous or reissue credits apply?

If you find serious or unclear defects

• Do not ignore them. Some issues can be solved with a release or an endorsement.
• For complex matters like mineral rights, probate, or boundary disputes, consider consulting a Texas real estate attorney who handles title issues.

Local insights for Collin County buyers

In McKinney and the greater DFW area, subdivision restrictions and HOA rules are common. Make sure you understand any recorded covenants before planning exterior changes or improvements. Also, because mineral reservations are widespread in Texas, pay attention to any mineral language in your commitment. If surface use is important to your plans, ask the title officer to explain the recorded documents.

Finally, keep in mind that while a seller often pays for the owner’s policy locally, everything is negotiable in the contract. If you are competing in a multiple-offer situation, you may choose to cover more costs to strengthen your offer. If the market is slower, you can ask for the seller to cover additional fees.

Bottom line for McKinney buyers

Title insurance is a smart, one-time investment that helps protect your ownership. Understand the difference between owner and lender policies, confirm who pays in your contract, and read your title commitment carefully. Focus on names and legal in Schedule A, to-do items in Requirements, and every Exception in Schedule B. Ask questions, order a survey if needed, and secure endorsements that make sense for your property.

If you would like a local, high-touch guide through each step from offer to closing, connect with Mike Farish. You will get clear answers, proactive coordination with the title officer, and a smooth path to the keys.

FAQs

What does Texas title insurance cover for homeowners?

• It covers certain pre-existing title defects that affect ownership, such as undisclosed liens, forged documents, or recording errors, subject to policy terms and exclusions.

Who typically pays for title insurance in McKinney, Texas?

• In much of Collin County, the seller commonly pays the owner’s policy and the buyer pays the lender’s policy, but your contract controls and market conditions can shift customs.

How are title insurance rates set in Texas?

• Base premiums are promulgated by the Texas Department of Insurance, so title companies use the same rate schedule. Endorsements and closing fees are separate.

What is a title commitment and why does it matter?

• It is the title company’s promise to issue a policy after certain requirements are met. It lists coverage details, items to clear, and exceptions that will remain unless removed.

Can I remove survey exceptions on my title policy?

• Often you can reduce or modify survey-related exceptions by providing a current survey and obtaining the appropriate endorsement if the underwriter approves.

How do mineral rights affect homebuyers in Texas?

• Mineral reservations or severed estates are common. They can affect surface use and are usually listed as exceptions that remain unless a recorded extinguishment exists.