submitted by ROX Real Estate
The title company and escrow company may be the same company or it can be two or more companies working together.
An escrow company is an independent, neutral intermediary that manages the exchange of money for real property.
Whether you are the buyer, seller, lender or borrower, you want the assurance of knowing that no funds or real property will be exchanged until all the written contract instructions have been followed and the conditions met. All changes to the contract must be in writing and signed by all parties to indicate agreement. The escrow office maintains confidentiality and keeps the funds and documents safe during the escrow. When all the terms and conditions of the contract are met, and all parties agree, the escrow officer will disburse funds and record the documents with the county recorder’s office.
A title company is a specialty insurance company that insures the property is free and clear of title defects. Depending on whether the transaction is cash or financed there will be one title policy issued for the owner and if financed, a second policy written to provide the lender additional coverage.
Prior to issuing the policy, effective with the close of escrow, the title company will do perform an extensive title search and examination. If a defect is found, the examiner will work with the seller to resolve the issue. Some of the common title defects include liens including mechanics’ liens, back taxes, claims related to homeowner divorce and remarriage and death of an owner.
Title insurance is a single premium policy, issued once at close of escrow. The premium is collected as part of the transaction. If you refinance the loan at a later date, a new title insurance policy is issued.
