Buying and/or Selling a home can be a confusing process. There are lots of moving parts and lots of terms you may or may not fully understand… Escrow, Title Insurance, Preliminary Title Report… to name a few. To help you better understand the process, I’m sitting down with industry experts to breakdown the process for you. This week on Real Estate 101 we’re discussing closing and escrow with Janette Tims, an escrow officer at Western Title and Escrow in Eugene, Oregon.
What is Escrow?
Escrow is the process in which buyers and sellers of a piece of property establish terms and conditions for the transfer of ownership of the property. These terms and conditions are given to a third party known as the escrow holder. In turn, the escrow holder has the responsibility of seeing that the terms of the escrow are carried out. The escrow is an independent neutral account and the vehicle by which the mutual instructions of all parties to the transaction are compiled with.
What is Title Insurance
The purchase of a home is often the single largest investment people will make in a lifetime; therefore, the importance of fully protecting such an investment cannot be over stressed. Title insurance is protection which assures that the rights and interests to the property are as expected, that the transfer of ownership is smoothly completed and that the new owner receives protection from future claims against the property. It is the most effective, most accepted and least expensive way to protect property ownership rights.
What is a Preliminary Title Report
Before issuing a policy of title insurance, the title company must review the numerous public records concerning the property being sold and financed. The purpose of this title search is to identify and clear all problems before the new owner takes title or the lender loans money. The research helps determine if there are any rights or claims that may have an impact upon the title such as unpaid taxes, unsatisfied mortgages, judgements, tax liens against the current or past owners, easements, restrictions and court actions. These recorded defects, liens and encumbrances are reported in a preliminary report to applicable parties.
If you are thinking about buying or selling, be sure to build a team you can trust. People who will communicate clearly and keep the transaction on track, as well as, a team who will keep your best interests in mind. Excellent customer service is at the HEART of what I do. If you don’t have a lender, I’m happy to recommend several to choose from whom I trust and do business with regularly.