Escrow and Title Services - Your purchase contract has been accepted - What happens next?

The Escrow Process

Open escrow and deposit earnest money in a separate escrow account

Determine ownership and status of the property by doing a title search

Issue title commitment and begin process to provide clear title to property

Request payoff information from seller's lender(s),the homeowner's association, if applicable, etc.

Prorate and fees, such as property taxes

Prepare the settlement statement for both parties to review

Arrange for the buyer and seller to sign the documents and deposit funds

Ensure all contract commitments are fulfilled and request funds from the lender

Record documentation at the County Recorder to transfer the property to the buyer

Close escrow and disperse funds

Why you need Title insurance

The purpose of title insurance is to protect the buyer and lender against loss of damage due to defects in the title to the real property being purchased. It also assures the lender of the priority and validity of the lien. The following are some of the most common types of title defects:

• Fraud and forgery

• Defective deeds

• Unpaid taxes

• Unsatisfied liens and judgments

• Violation of deed restrictions

• Undisclosed spouses or heirs

• Clerical errors in the land record

• Mistakes in recording documents

• Defective foreclosures or tax liens