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Title & Escrow Frequently Asked Questions
For most of us, buying a home is the largest investment we’ll make in our lives. Understanding title and escrow is the smart way to protect your property rights. We know these things can be confusing, so we are here with a Q & A that will provide good insight.
WHAT IS TITLE INSURANCE?
Different from other types of insurance that protect you against losses that may happen in the future, title insurance protects YOU, the insured, from matters or faults that occurred in the past that may affect your property.
HOW DOES TITLE INSURANCE PROTECT YOU?
Close scrutiny by the title insurer of property-related-recorded documents aids in the elimination of many possible hidden risks that can undermine the validity of homeownership. While the possibility of unidentified risks still exist after a transfer of title, the purchase of a title insurance policy protects the lender and buyer from invalid claims made against the title of a property.
WHAT IS ESCROW?
An escrow, sometimes referred to as a closing, is an arrangement in which an impartial third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and seller and/or lender. The funds are distributed and documents are recorded only in accordance with the written instructions received from the parties, thus consummating the transaction.
HOW DOES ESCROW PROVIDE PEACE OF MIND?
People buying and selling real estate utilize an escrow for their protection and convenience. All parties rely on the escrow holder to faithfully carry out their mutually agreed upon instructions relating to the transaction, or to advise them if any of the instructions are contradictory or cannot be completed. Once all terms and conditions of the written instructions have been fulfilled, and all closing conditions are satisfied, the escrow is closed and the transfer of property and money is accomplished.
Both title insurance and escrow are important to protect buyers and sellers in a home transaction. We are always willing to answer any further questions you may have, just let us know.
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