Escrow is a service which provides the public with a means of protection in the handling of funds and/or documents. Escrow enables the buyer and the seller to transact business with each other through a neutral party, thereby minimizing their risk. Once a seller and potential buyer reach an agreement, it will be time to select an escrow company. When a purchase offer has been signed by both sellers and buyers and an earnest money deposit has been put into a trust account, the transaction is said to be "in escrow."
In the escrow, all parties involved give their instructions to this neutral intermediary, the escrow holder, whose duty it is to assure that no funds or property will change hands until all instructions have been carried to completion. In some parts of the country an impound account can be referred to as escrow. An impound account is when the lender collects an additional amount above and beyond a home owner's principal and interest payment to pay hazard insurance and property tax as they come due.
When the escrow process is complete, the escrow service records the new deed in the buyer's name, which finalizes the transaction. Funds are often held in escrow after the close; this is common when it comes to paying contractors that may have unfinished work.
When considering your escrow company, it is important to select someone you trust to safeguard your funds and ensure a seamless closure to your transaction. As a full service, professionally staffed escrow company, licensed and regulated through the Department of Business Oversight (DBO), Quality Escrow is the best choice.
Title insurance protects against hidden title hazards that may threaten your financial investment in your home. There are two kinds of title insurance: Lender or mortgagee protection, and owner’s coverage
Most lenders require mortgagee title insurance as security for their investment in real estate, just as they may call for fire insurance and other types of coverage as investor protection. When title insurance is provided, lenders are willing to make mortgage money available in distant locales where they know little about the market.
Owner’s title insurance lasts as long as the the policyholder – or their heirs – have an interest in the insured property. This may even be after they have sold the property. Depending on local practices and state law where the property is located, you may pay an additional premium for an owner’s policy or you may pay a simultaneous issue charge – usually a smaller amount – for the separate lender coverage. You may even split settlement costs with the seller for the lender’s or owner’s policy.
How does this affect the escrow process?
A preliminary title report will be created from the title company, and that preliminary report will be sent to the Quality Escrow for review. We will work with the title company, the lender and other parties to the transaction to settle items listed on the preliminary report. Once everything is cleared, the title to the property is then transferred under the terms of the escrow instructions and the appropriate title insurance policies are issued.