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The Title Company and Escrow Agents
Role in Buying and Refinancing
The importance of Title and Escrow is often overlooked in the explaining of the homebuying, selling, and refinancing process. We wanted to offer a good explanation of what exactly the Title company and escrow officer does during a transaction. The title company and escrow officer is a neautral third party, and is never affiliated with either the Mortgage Planner, or the Real Estate agents. Rather, the role was established to protect and provide information, for YOU, the client. So we turned to Colleen Crowden of Financial Title Company in Roseville, CA to help us explain to you, what exactly Title and Escrow means, and does. She is one of the top escrow agents in the Placer and Sacramento Counties, and her client service and professionalism has earned the respect of many Mortgage Planners, Real Estate agents and clients!
To finalize the sale of the home a neutral, third party (the escrow holder, a.k.a. escrow agent) is engaged to assure the transaction will close properly and on time. The escrow holder insures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being finalized, including receiving funds and documents, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring you clear title to your property before the purchase price is fully paid.
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The documentation the escrow holder may be collecting includes:
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
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Upon completion of all instructions of the escrow, closing can take place. All outstanding payments and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to the seller and appropriate title insurance is issued as outlined in the escrow instructions.
At the close of escrow, payment of funds shall be made in an acceptable form to the escrow.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Prepare escrow instructions
- Request title search
- Comply with lender's requirements as specified in the escrow agreement
- Receive funds from the buyer
- Prorate insurance, tax, interest and other payments according to instructions
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer have been met
- Disburse funds and finalize instructions
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- Give advice - the escrow holder must maintain neutral, third-party status
- Offer opinions about tax implications
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When it's time to refinance:
On a Refinance the escrow agent also orders your current mortgage payoffs and handles disbursing the funds to any credit cards, auto loans, etc. that you may be paying off in conjunction with your refinance. They also handle sending you any cash out you may be recieving.
If you have any further questions regarding how escrow or title works - please contact us, or you can e-mail Colleen directly at ccrowden@financialtitle.com |