Title, Escrow, Deed - What is that?

Title, Escrow, Deed - What is that?  - from a RISMedia article by Barbara Pronin, and Cornerstone Title blog.

For some first-time home buyers, understanding the difference between ‘title’ and ‘deed,’ and what happens when their home is ‘in escrow,’ can be puzzling - especially since title is not a physical document, but a deed most certainly is.

Here’s a simple explanation.

First, there are two parts to every real estate transaction. The first part, title, is research done by the title company to verify that the seller owns the property and has the full right to sell it.

During the title search, a reputable title agent examines all of the property’s legal records and documents, including prior deeds, liens, mortgages and releases, over an extended period of time. That’s to ensure the property is clear of liens incurred by previous owners, that the property lines are correct, and that the seller has clear ownership of the property and has the right to transfer ownership to the buyer.

A search performed by title experts is crucial to a transaction because it’s the only way to discover the legal status of a property and prove that it is free of liens.

The second part of the transaction is the escrow stage. At this point, title and/or escrow agents work with the buyer and seller to ensure that all the terms and conditions of the transaction are followed, and to receive and disburse funds as instructed for the transacting parties. Escrow is an impartial third party - the gatekeeper, you might say - of the financial process, the loan documents, and the legal documents to be recorded with the county when the transaction is concluded.

The deed, unlike title or escrow, is a written statement of property which contains the names of the seller and the new owner as well as a description of the property. It must be notarized and filed with the county and may require witnesses. Once your buyer holds the deed in their hands, they can prove legal ownership of the property.

Thinking of buying or selling? I like to explain how things work to my clients.

Thank you for reading!  Share if you like, and contact me for your real estate questions!

Francis Rolland

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Buying a home, second thoughts...

Many recent homebuyers would make different choices if they had a second chance, according to a study commissioned by JPMorgan Chase & Co.

New homeowners say they wish they had done more homework at the outset of their home search and purchase process.  Nine of every 10 buyers felt prepared when they bought their home, but in hindsight, 56% wish they were armed with more knowledge about the financial aspects of purchasing a home, such as the closing process (22%), making an offer and negotiating (19%) and financing (15%).

Many recent homebuyers were surprised by how long the home-buying process took:  40% say it took longer than they expected.  And while more than 80% of buyers had considered their home move-in ready, 76% have done or are planning to do renovations to their home in the near-term.

Two thirds of recent homebuyers sought advice from real estate agents, the study finds.

"While consumers said they felt prepared to buy a home and were satisfied with their home purchase, our results found that there are challenges and areas for improvement," says Lisa Foradori, chief marketing officer for Chase Mortgage Banking.

Many Realtors come from the teaching profession, and there is a good reason for that: to be a good agent, one needs to have a passion for explaining why and how things work during the buying (or selling) process.  And even when clients have bought real estate in the past, they need someone on their side who knows what has changed recently, both in the market place, and in the profession (new forms, new rules and laws, new tools).    I always advise my clients to work on their loan qualifications first: there are many choices involved in getting a loan, and choosing the right loan should not be an afterthought.

Thanks for reading!
Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates