What does title and escrow do?

A title and escrow company—also known as a settlement agency and in some states, a real estate law firm—acts as the non-interested third party that follows instructions in a real estate transaction. They facilitate the communication between seller and buyer, takes care of the closing process and provides title insurance. Essentially a title and escrow company will help finalize the transfer of a property from seller to buyer. Watch the full video above to learn more!

When does the title and escrow job begin?

When your offer gets accepted. When a real estate agent submits a buyer’s offer (RPA or residential purchase agreement), the buyer can choose the title and escrow company they will use. The seller can counter this part of the contract term BUT is up to the buyer to choose the company they want to work with, in the lending world this is known as “Services You Can Shop For”.

Once your offer is accepted and both the seller and buyer agree to all terms in writing, the residential purchase agreement (RPA) will be sent to the title company to “open escrow”. In Nevada, it’s very common to have an earnest money deposit or EMD in the RPA that must be deposited with the title company within 24 to 48 hours of offer acceptance. The buyer will receive wiring instructions from the chosen title and escrow company. It’s extremely important that the buyer verifies the wiring instructions with their escrow officer before wiring their funds; wire fraud is very common and real. Always verify routing and account numbers over the phone before heading to the bank and while in the bank, ask the bank rep to call the title and escrow company to triple check. Better be safe than sorry.

Next, comes the title report

Your title company will run a title report to make sure the subject property has no liens, meaning that there are no other property owners that have not been disclosed upfront and that when the title transfer is done, all debts are paid prior to change of ownership. (e.g., mortgage, utilities, solar, or IRS liens). Owner’s insurance protects the new owner against any liens that were not properly recorded or overseen OR if someone comes after closing claiming to own the property.

What is the difference between owner’s title insurance and lender’s title insurance?

Owner’s title insurance or CTLA policy is commonly covered by the seller in Nevada and it protects the buyer against liens and ownership claims.

Lender’s title insurance or ALTA policy is required by the lender and is commonly covered by the buyer in Nevada. This policy assures the lender the mortgage loan will be recorded in firs position. For example if the homeowner acquires leased solar panels, they will be recorded on second position.

Both fee above are account for in the transaction’s closing costs along with notary fees, recording fees, title inspection, special endorsements, settlement fees, shipping and courier fees. Every title and escrow company have their set fees. You can fee Security 1st Title Fee Calculator by clicking here.

What is the statement of information? And why the title company asking for this?

The statement of information is a form requested by the title and escrow company that needs to be completed by the seller(s) and buyer(s) at closing to insure title can verify their identity in case of a name mismatch especially when they have a common name. In the past we have seen alerts come up for IRS liens and child support liens that do not belong to the parties involved in the transaction. Having the statement of information ready helped us clear the alerts and have a successful closing.

Would you like to get a closing cost comparison? Or would like to know if your home was properly recorded? Message us here!