What Are Title And Escrow Services?

Title insurance insures against loss sustained by an insured party due to the condition of title being other than as insured. The beneficiaries of title insurance policies generally are real estate buyers and mortgage lenders. A title insurance policy protects the named insured against title defects, liens and encumbrances existing as of the date of the policy and not excepted from coverage. For a one-time premium, the policy remains in effect until the property is sold or refinanced.

The title company is a neutral third party that performs the following functions in relation to the closing of a real estate transaction:

  • Receives a complete and fully executed purchase and sales agreement and/or lender's instructions.
  • Orders and delivers a commitment for title insurance to the parties to the transaction.
  • Orders all payoff statements and demands necessary to clear the title.
  • Obtains all documents needed to transfer title.
  • Prepares the settlement statement.
  • Obtains all necessary signatures and funds to close the transaction.
  • Records and delivers all documents and disburses the funds according to the parties and/or lender's instructions.