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| Whenever someone decides to buy or refinance property,
title companies have the ability to check public records regarding the
history of that property. Looking for uncleared liens, claims or
easements is part of what title companies do. Sometimes long-lost
relatives may have a claim on the property without the seller's
knowledge. People have even fraudulently sold houses that don't belong
to them. This is why when utilizing a commercial lender, they require
title insurance as part of the package.
Title insurance serves as basic risk elimination. A preliminary report outlines the conditions under which a title will be insured. Once the new deed and loan documents are recorded, a title insurance policy is issued to the new owner and lender. This assures the lender of validity and priority of their loan document. And as for the new owner, any undisclosed claim (covered by the owner's policy of title insurance) that threatens ownership of the home will be dealt with, or you will be reimbursed exactly as your policy of title insurance provides. What is Escrow?Another service offered by many title companies is escrow. Escrow is the process by which the interests of all parties in a real estate transaction are protected, ensuring that all conditions of the sale have been met before property and money changes hands. You'll meet with an escrow officer who will oversee this portion of the property sale. It is also the escrow officer who you'll meet with to sign all the documents prior to your property closing escrow. The escrow account is an independent depository wherein all funds, instructions, and documents for the sale/purchase of your home are held, including the buyer's down payment, lender's funds, documents for the new loan, hazard and title insurance, inspection reports, and grant deed. At the close of escrow, the "escrow holder" delivers these items to the appropriate parties, disburses the funds, and handles the associated paperwork. The Escrow ProcessYour escrow is created shortly after you execute the purchase agreement. It cannot be successfully completed until all escrow instructions have been carried out and all parties have signed escrow documents. The length of escrow can range from a few days to several months, depending on the terms of the purchase agreements. On average, an escrow closes within 45 days. Some Common Questions |
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| How does an escrow get opened? | As your real estate professional, I will coordinate opening your escrow. After the purchase agreement has been signed by all the parties the buyer's agent will place the initial deposit into an escrow account at a Title Company. |
| Where does your deposit money go? | The funds are deposited in a separate escrow or trust account. These funds are processed through your local bank. Your sales contract will generally include written evidence of your deposit. You will receive a receipt for the funds from the Title Company. |
| Do you need to provide information? | A Statement of Identity may be required as part of your paperwork. Many people have the same name, the Statement of Identity is used to identify the specific person in the transaction. The information provided is confidential; such as date of birth, social security number, etc. |
| How does the escrow process work? | Your escrow officer takes instructions based on the terms of your purchase agreement and the requirements of your lender. Your escrow officer can hold bills for work performed and inspection reports as required by the purchase agreement. Escrow functions also include hazard and title insurance, and the grand deed from the seller to you. Your escrow cannot be completed until these items have been satisfied and all parties have signed escrow documents. |
| How long does the escrow process take? | The time it takes to complete your escrow is determined by the terms in the purchase agreement. This can be from a few days to several months. Usually in 30 to 60 days your transaction will be complete. |
| Are there some parts of the transaction that escrow does not do? | Yes. They would include personal property that are included as part of the sales agreement, and loan negotiations between the buyer and the lender. These are just some examples. |
| What happens after the sign off? | Your escrow officer will return all documents and instructions to your lender for final review. This review usually occurs within a few days and upon completion, the lender is ready to fund your loan. Your escrow officer will be notified of the funding date and will "release" your documents for recording and the transfer of title will take place. |
| What is escrow closing? | An escrow closing signifies legal transfer of title to the property from the seller to the buyer. It is the culmination of the transaction. Usually the grant deed and deed of trust are recorded within one working day of the ecrow's receipt of loan funds. This completes the transaction and signifies the "close of escrow." |
| When will you receive the deed? | The original deed to your home will be mailed directly to you at your new home by the County Recorder's office. This usually take several weeks, sometimes longer. |
