Life is Good With MCE (Mandatory Continuous Education)

Every study of high achieving men and women proves that greatness in life is only possible when you become outstanding at your chosen field. --- Brian Tracy

One of the things I love most about being a Texas REALTOR® is MCE (Mandatory Continuous Education). The foundation of my professional career in based on education. Unlike other degrees or Certifications that I have achieved as a Business Woman, being a licensed REALTOR® holds me to a higher standard. This week I set aside time for an  MCE class learning about Texas Title Insurance. A Title is the collective ownership records of a piece of real estate, including the transfer of any property rights and any loans using the property as collateral. Traditionally, in Texas, the Seller (with the exclusion of a Bank Foreclosure) pays for the Title Insurance on behalf of the buyer.

Importance of Title Insurance

Title Insurance (unlike home insurance, the type of insurance that protects you against property damage), gives the buyer a clear line of title which makes you much less vulnerable to ownership claims from other parties and to any outstanding and unknown debts of previous property owners.

After a contract is executed the Title Company will check for defects in your title by examining public records, including deeds, tax records, liens, mortgages, wills, divorce decrees, judgments, maps and encumbrances. If per chance there is a claim against your property, subject to certain limitations, the company will defend you in court, paying you for covered losses up to the amount of your policy.

Types of Title Polices

In Texas, the most common types of title policies are Loan Policies and Owner Policies. In Texas, owner policies protect property buyers; loan policies protect lenders. Unless a borrower purchases a loan policy, most lending institutions will not loan the money to purchase real estate.  Loan policies remain in effect until the loan is repaid. If a home owner refinances their home most lenders will require you to buy a new loan title policy.

An owner policy provides coverage, covering you up to the value of the property at the time you purchased the policy; however, it doesn't cover any increse in value, unless you purchase an increased value endorsement. This type of policy remains in effect as long as you or your heirs own the property or are liable for any title warranties made when you sell the property.

It's Not Just About the Money

Prospective buyers often get so caught up in the dream of owning a home, finding the right location, and having enough money to buy the house, that many don't take the time to read the Policy Title when it is issued by the Title Company. In general, the policy forms in Texas are standardized, regardless of the Title Company; however, it's extremely important to read your policy carefully because the description  of the coverage exceptions differ from one company to another.

Know what the Title Policy covers and what it doesn't cover! Read everything provided to you by the Title Company, paying particular attention to SCHEDULE B which references exceptions which may include some of the following:

• Any titles or rights asserted by anyone, including, but not limited to, persons, the public, corporations, government or other entities.
• Homestead or community property or survivorship rights, if any, of any spouse of any insured (applies to the owner's policy only). 
• Any discrepancies, conflicts, or shortages in areas or boundary lines, or any encroachments or protrusions, or nay overlapping of improvement.

Buying a home is a big deal. It's not just about picking out the right house, deciding on colors, buying furniture after you take possession, or decorating your home. It's an educational experience and just like a Texas REALTOR® is required to take MCE (Mandatory Continuous Education), the prospective buyer also needs to become educated about the home buy process, and reading to understand your Commitments and other notices issued by the Title Company is of high importance. Getting answers to your questions from the Title Company, before you take possession  is part of the process to achieving your goal in acquiring and understanding what it means to be a home owner.

A Texas REALTOR® is a lifelong student. Unlike the education I received to achieve my MBA, mandatory continuous education is never ending. Learning something new has no limits. The only problem I see with taking time out of my busy scheduled for MCE isn't that it's a problem to carve out time, it's that I can't afford not to learn on a continuous basis.