In many real estate transactions in Orange County, California, once there is an accepted offer, which means the purchase contract is signed by both the buyer and the seller, copies should be delivered to escrow.
The reason for this is because, the escrow company acts as a neutral third party for the buyer and the seller. Instead of the seller holding your deposit money, escrow holds it in an account. Their job is to make sure that 1.) clear title is transferred to the buyer, .2) all of the purchase contract terms are satisfied and .3) that the home inspectors, the appraiser, the pest control company, the lender, title insurance company, and the seller’s agent if applicable, and other related parties, are paid their agreed upon fees from the remaining amount the seller receives prior to
the deed transfer.
Among the most important tasks that escrow performs is title research. This is sometimes accomplished by the Title Insurance company, yet many escrow companies are under the same umbrella as the title company. The main objective is to guarantee to the buyer and the lender that the seller has clear and transferable title to the property and that it doesn’t have any additional liens outside of a mortgage like a tax or mechanic’s lien,or a lawsuit that will put a cloud on title. Once title is assured as being free of these negatives, the Title Company can commit to insure both the home buyer and the lender even if detected after closing.
Escrow and title companies have developed into a more customer service focused business in the last decade as evidenced by them having a remote signing agent, which means a person who is a certified notary and will come to your home or work to finalize the final closing documents.
Based on the governing regulations involving real estate settlement procedures, RESPA , the buyer and seller do have the right to choose the Escrow and Title Insurance company for their transaction. Challenges may arise when each party selects a different company and are not under the same company. Therefore, either the seller or buyer may concede the choice and allow the other to select a company that can coordinate with a different department in order to expedite the process. Quite often it just isn’t worth all the fuss, unless there are 100s of dollars of difference from one company to another that one will have to pay.
Among the last vital tasks for you to fulfill prior to settlement is to setup hazard insurance and flood insurance, if required, for your home. Prior to gaining the keys to your homes, you must give the Escrow Officer proof that you have gotten this insurance. A good real estate agent will have you aware of this and other conditions during the process.