Most people only buy a house a few times in their life. That means most buyers walk into a closing without knowing what to watch for, and they trust the professionals in the room to catch problems before they happen. Most of the time that trust is well placed.
Unfortunately, title issues still come up more often than buyers expect, and some of them do not show up until months or years after closing.
Here are five issues that come up frequently in real estate closings, and what buyers and investors should know about each one.
The Contract
Before any of the title work even begins, the most important document in the deal is the purchase contract, which is the one buyers sign first. Once it is signed, buyers are bound by its terms at closing, regardless of whether or not they understood every provision when they signed it.
I strongly suggest not just relying on a real estate agent or anyone who is involved in selling the property to explain the contents of the contract. Remember, the listing agent works for the seller legally. So does the selling agent unless buyers sign a contract with them stating that they represent the buyers.
Read the contract in full, and if any part of it is unclear, be sure to ask an attorney to review it before you sign.
After the Contract Is Signed
Once the contract is signed, it goes to a title company, which acts as the settlement agent for the transaction. The title company orders a search of the property records and receives back a document called a commitment for title insurance. This document specifies who currently owns the property, what interest they hold, the legal description of the property, and what needs to be cleared up before the buyer can receive good title.
Buyers should also get a survey, which is a drawing of the property that is prepared by a licensed surveyor. A survey shows the improvements on the property, the easements, and anything physical that affects it. It can also reveal problems such as encroachments, such as a structure built over a setback line. These issues are not necessarily deal breakers, but buyers need to know about them before closing.
Homeowners Association Issues
Most properties developed since the 1980s come with a homeowners association (HOA) and a set of recorded restrictions that bind every owner going forward. Before closing, buyers should ask for and read the HOA resale certificate. It shows any dues owed to the association and, just as importantly, any existing violations tied to the property.
Violations do not always surface on their own. In one closing, a paint color violation on the house was never caught before closing, and the buyer and seller ended up in a dispute afterward regarding who would pay to fix it.
It is also worth reading the actual restrictions before closing, not just the resale certificate. These can run well over a hundred pages, and they sometimes include rules buyers do not expect, such as limits on what vehicles can be parked in a driveway. Buyers who skip this step can end up finding out about a restriction after they already own the home.
Property Taxes
Tax issues are the single most frequent reason title insurance companies pay claims. A few situations account for most of the trouble.
When a house is newly built, the prior year’s tax bill may reflect only the value of the lot, not the finished home. If taxes are prorated at closing using that lower number, because the current year’s tax bill is not yet available, the buyer can end up absorbing a larger share of the true tax bill once the county records have been updated.
Property that has been taxed under an agricultural exemption carries a different kind of risk, particularly in commercial deals. If the use of the property changes after the sale, the tax office can go back and reassess the property at full value for as many as five years. Buyers planning to change how a property is used should ask about this before they close, not after.
Homeowners over age 65 receive a significant discount on their property taxes. That discount ends the moment the owner passes away; however, tax offices often have no way of knowing the owner is deceased until a document, such as an affidavit of heirship or a probate filing, is recorded. In the meantime, heirs sometimes continue paying the reduced rate, in some cases for years, without realizing they are no longer entitled to it.
If a property changes hands while it is still being taxed at that lower rate, the tax office will eventually find out. It will reassess the property back to the date the original owner died and send the new owner a bill for the difference. This is a real risk for anyone buying property that was inherited, especially investors who buy directly from heirs.
A settlement agent who knows to look for this can catch it before closing. One who does not can leave a buyer with a surprise bill that arrives months or years down the road.
All of these situations can be prevented if the settlement agent understands the tax history of the property and orders a current tax certificate before closing, rather than relying on last year’s bill.
Your Title Insurance Policy Is Not Just Paperwork
About six weeks after closing, buyers receive an owner policy of title insurance in the mail. Because it arrives well after closing, when most of the other paperwork has already been filed away, it may not get the attention that it deserves. This policy is what protects a buyer if a problem with the title surfaces later, and title problems do surface, sometimes in dramatic ways.
For example, forged deeds happen more often than most buyers realize, and they can result in a complete failure of title. This means the buyer does not actually own the property. In one widely known case, a person posing as a property seller signed all the closing documents using a fake ID. The real owner had been killed, but this was not discovered until the buyer began renovation work.
These situations are rare, but serious. The owner policy of title insurance is what allows the buyer to make a claim and recover the loss. Keep it somewhere safe, along with the rest of your closing documents.
The Takeaway
None of these issues are reasons to be afraid of buying property. They are reasons to work with people who know what to look for and who will be proactive on your account.
A knowledgeable settlement agent will order a current tax certificate, request the HOA resale certificate, and review the survey before closing rather than after.
When a contract, a tax bill, or a title commitment raises a question, contact a real estate attorney to help you sort out the issue before it becomes a problem. The Lonergan Law Firm PLLC and title closing office has been serving Dallas real estate investors and homebuyers for 26 years.
Gaylene Rogers Lonergan
Lonergan Law Firm, PLLC
12801 N. Central Expressway, Suite 150, Dallas, Texas 75243
(214) 503-7509
grogers@lonerganlaw.com | LonerganLaw.com
© Gaylene Rogers Lonergan and Lonergan Law Firm, PLLC, 2026. All rights reserved. This article is provided for educational reasons exclusively and is not meant to be construed as legal advice. The Lonergan Law Firm, PLLC, will represent you only after being retained and that agreement is made in writing.
