Title Issue Disclosed By Seller

[Jeff Nichols]

I made an offer on a property and in the counter-offer it had this exemption: 

"Buyer understands that an issue with the title has been disclosed by the seller; said issue First American Title Company of Texas has previously agreed to insure over. Buyer agrees to further research this with Radiant Title Company or a title company of their choosing for a full understanding. Buyer also agrees to accept or reject the title condition and title insurance as it will be provided by the closing company within 6 days of Binding agreement of this contract." 

I wasn't aware of any issue with the title till i read this in the counter-offer. 

Any helpful insights?

[Tom Gimer]

Title companies don’t insure over major issues voluntarily.

This is likely an unreleased prior owner trust. First American probably issued an Owners Policy in the past which did not take exception to this issue. That’s why they will do it again — they are already on the hook.

If you use a different title insurer they will want to obtain a Letter of Indemnity from First American.