1 minute read
Opening Escrow
Opening Escrow A Title Company is your friend that moves you toward closing
Our title partners are here to help us through this process. They are trained professionals that supervise the transaction to closing. They will make sure that no funds or property change hands until all terms and instructions in the purchase and sale agreement have been followed.
Advertisement
Once an offer on a property is mutually agreed to by buyer and seller, the transaction is then placed into “escrow.” Escrow is a term that describes neutral third-party handling of funds, documents, and tasks specific to the sale of the property. The purpose of escrow is to manage the disbursement of funds and documents according to the mutually agreed upon terms for the buyer and seller.
A record of all real estate sales and events on all properties is filed in public archives. A title company will do a title search of the records to see if there are any issues such as liens, levies, or encumbrances associated with the property. Some issues don’t show up on the title search, such as forgeries, filing errors, and undisclosed heirs, so title insurance protects the buyer from any unforeseen problems. In Oregon, the seller provides title insurance for the seller and the buyer provides title insurance for the lender.
Before a title insurance policy is issued, a title report is prepared based on a search of public records. This report describes the property, along with any title defects, liens, or encumbrances discovered in the course of the title search. It is different than casualty insurance in that you pay a one-time fee, and it protects against the past (as opposed to future) events.
Some ‘clouds on title’ can be corrected relatively easily while others can become quite complicated to remove. You should insist on being kept informed of every step in the title examination process. If title problems are uncovered, you need to understand your legal rights, including consulting an attorney if needed.
Title insurance is the best way to protect yourself against title defects that have occurred in the past, which may not appear until after you’ve taken ownership of the property.
