Escrow & Title
What we do- Escrow & Title
- In-house Search and Exam
- Direct Title Services
- Trustee Sale Guarantee
- Litigation Guarantee
- Limited Loan Policies
What is Title Insurance?
Title insurance is usually obtained when real property is purchased. The policy of title insurance insures the owner and/or the lender of ownership of the property. There are various coverages afforded, but a basic policy insures that the buyer is the owner and that any lender shown on the policy is an ”insured” lender. Many different types of extended coverages are available; for example, an ALTA policy is quite often required by an institutional lender to afford them additional protection under the title insurance policy. The title policy is written after an extensive examination of the public record is made and the recording of the required documents as called for in the escrow. Customarily in Arizona, the seller will pay for the owner’s title policy and the buyer will pay for the lender’s title policy. But in almost every case, the question of who pays closing costs is a matter of agreement between the parties. In the case of some FHA or VA transactions, the escrow officer must follow the guidelines as required by the lender and/or government.The National Association of Insurance Commissioners has defined the characteristics of Title Insurance that distinguish it from other insurance lines as:
- The title insurance policy is a one-time fee
- Low premium rates
- Proportionately low loss and high expense to premium ratios
- Most of premium paid for title insurance pays for the title examination required for the policy
- Insures the current status of title instead of unforeseen future events
- Policy term is coextensive with the interest insured
The essence of title insurance is to insure the status of the title for a specific time by assuring the policyholder that there are no recorded or hidden defects to the interest insured in addition to those listed in Schedule B (“Items of Record” or recorded documents that affect a subject property).
- REO (bank-owned real estate)
- Short sales
Escrow – what is it?
Very simply defined, an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. The California Escrow Law Section 17003 of the Financial Code provides the legal definition.
Why do you need an escrow?
Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
How does escrow work?
The principals to the escrow – buyer, seller, lender, borrower – cause escrow instructions, most usually in writing, to be created, signed and delivered to the escrow officer. If a broker is involved, he will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents.
The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow can be met or achieved, the escrow will be “closed.” Each escrow, although following a similar pattern, will be different in some respects, as it deals with your property and the transaction at hand. The duties of an escrow holder include following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with the instruction; paying all bills as authorized; responding to authorized requests from the principals; closing the escrow only when all terms funds in accordance with instructions and provide an accounting for same, the Closing or Settlement Statement.
Who chooses the escrow?
The selection of the escrow holder is normally done by agreement between the principals. If a real estate broker is involved in the transaction, the broker may recommend an escrow holder. However, it is the right of the principals to use an escrow holder who is competent and who is experienced in handling the type of escrow at hand. There are laws that prohibit the payment of referral fees; this affords the consumer the best possible escrow services without any compromise caused by a person receiving a referral fee.