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BUYERS
REAL ESTATE INFORMATION SERVICES
What is an escrow
company and what does it do?
What is title
insurance and why do you need it?
Riverside County Building & Planning Dept.
Imperial County Building & Planning Dept.
How
California real estate taxes are levied, assessed &
collected.
LIFE OF AN ESCROW
It all begins with the
offer and acceptance skillfully negotiated by the real
estate agents representing Buyer and Seller.
The Buyer(s)
Tenders a written offer
to purchase (or accepts the Seller's counter-offer)
accompanied by a good faith deposit amount.
Approves and signs the
escrow instructions and other related instruments
required to complete the transaction.
Approves the
preliminary report and any property, disclosure or
inspection report called by the purchase and sale
agreement. (Deposit Receipt)
Approves and signs new
loan documents and fulfills any remaining conditions
contained in the contract, lender's instructions and/or
the escrow instructions.
Deposits funds
necessary to close the escrow. Approves any changes by
signing amendments in the escrow instructions.
The Lender (when
applicable)
Accepts the new loan
application and other related documents from the Buyer(s)
and begins the qualification process.
Orders and reviews the
property appraisal, credit report, verification of
employment, verification of deposit(s), preliminary
report and other related information.
Submits the entire
package to the loan committee and/or underwriters for
approval. When approved, loan conditions and title
insurance requirements are established.
Informs Buyer(s) of
loan approval terms, commitment expiration date and
provides a good faith estimate of the closing costs.
Deposits the new loan
documents and instructions with the escrow holder for
Buyer's approval and signature.
Reviews and approves
the executed loan package and coordinates the loan
funding with the escrow officer.
The Escrow Officer
Receives an order for
escrow and title services.
Orders the preliminary
report and examination on the subject property from
Chicago Title.
Acts as the impartial
"stakeholder" or depository, in a fiduciary capacity,
for all documents and monies required to complete the
transaction per written instructions of the principals.
Prepares the escrow
instructions and required documents in accordance with
terms of the sale.
With the authorization
from the real estate agent or principal, orders demands
on existing deeds of trust and liens or judgments, if
any. For assumption or subject to loan, orders the
beneficiary's statement or formal assumption package.
Reviews documents
received in the escrow: preliminary report, payoff or
assumption statements, new loan package and other
related instruments. Reviews the conditions in the
lender's instructions including the hazard and title
insurance requirements.
Presents the documents,
statements, loan package(s), estimated closing
statements and other related documents to the
principal(s) for approval and signature, and requests
the balance of the buyer's funds.
Reviews the proceeds of
the loan(s) from the lender(s).
Determines when the
transaction will be in the position to close and advises
the parties.
Assisted by title
personnel, records the deed, deed of trust and other
documents required to complete the transaction with the
County Recorder and orders the title insurance policies.
Closes the escrow by
preparing the final settlement statements, disbursing
the proceeds to the Seller, paying off the existing
encumbrances and other obligations. Delivers the
appropriate statements, funds and remaining documents to
the principals, agents and/or lenders.
The Seller(s)
Accepts Buyer's Offer
to Purchase and initial good faith deposit to open
escrow.
Submits documents and
information to escrow holder, such as: addresses of lien
holders, tax receipts, equipment warranties, home
warranty contracts, any leases and/or rental agreements.
Approves and signs the
escrow instructions, grant deed and other related
documents required to complete the transaction.
Orders inspections,
receives clearances and approves final reports and/or
repairs to the property as required by the terms of the
purchase and sale agreement (Deposit Receipt).
Fulfills any remaining
conditions specified in the contract and/or escrow
instructions; approves the pay off demands and/or
beneficiary's statements.
Approves any final
changes by signing amendments to the escrow instructions
or contract.
Chicago Title
Receives an order for
title service.
Examines the public
records affecting the real property and issues a
preliminary report.
Determines the
requirements and documents needed to complete the
transaction and advises the escrow officer and/or
agents.
Reviews and approves
the signed documents, releases and the order for title
insurance, prior to the closing date.
When authorized by the
escrow officer, Chicago Title records the signed
documents with the County Recorder's office and prepares
to issue the title insurance policies.
WHAT IS TITLE
INSURANCE?
A Word About Real Estate
Real estate has traditionally been a family's most
valuable asset. It is a form of wealth that is protected
by many laws. These laws have been enacted to protect
one's ownership of real estate and the improvements
located on the land. The owner, the owner's family, and
the owner's heirs have extremely b rights or claims in
and to the property that you are buying. Those who may
have an interest in or lien upon the property could be
governmental bodies, contractors, lenders, judgment
creditors, the Internal Revenue Service, or various
other individuals or corporations. The real estate may
be sold to you without the knowledge of the party having
a right or claim in and to the property. In addition,
you may purchase the real estate without having any
knowledge of these rights or claims. In either event,
these rights or claims remain attached to the title to
the property that you are buying until they are
extinguished.
The Past Can Determine Your Future
Generally, a person thinks of insurance in terms of
the payment of future loss due to the occurrence of some
future event. For instance, a party obtains automobile
insurance in order to pay for future loss occasioned by
a future "fender bender" or for the future theft of the
car. Title insurance is a unique form of insurance. It
provides coverage for future claims or future losses due
to title defects which are created by some past event
(i.e., event prior to the acquisition of the property.)
These risks are far less obvious than those protected
against by automobile insurance, but can be just as
devastating. The following information will answer some
commonly asked questions about title insurance.
Will You Get Clear Title?
It is of utmost importance that you receive clear
title to the property when you purchase real estate. In
order to do so, you must first be informed of any
existing rights or claims that may, in the future,
threaten your title and possession to the property.
Title insurance provides you with this twofold
protection.
How Do You Find Out What Claims Exist?
In order to determine the status of title, Chicago
Title conducts a diligent search of the public records
for those documents associated with the property.
Chicago Title then examines those recorded documents in
order to determine if there are any rights or claims
that may have an impact upon the title to the property.
The title search may reveal the existence of recorded
defects, liens or encumbrances upon the title such as
unpaid taxes, unsatisfied mortgages, judgments and tax
liens against the current or past owners, easements,
restrictions and court actions. These recorded defects,
liens and encumbrances are reported to you prior to your
purchase of the property. Once reported, these matters
can be accepted, resolved or extinguished prior to the
closing of the transaction. In addition, you are
protected against any recorded defects, liens or
encumbrances upon the title that are unreported to you
and which are within the coverage of the particular
policy issued in the transaction. This is the first
benefit you receive from title insurance.
What About Undiscovered Claims?
The title to the property that you have purchased
could be seriously threatened or lost completely by
hazards which are considered "hidden risks." "Hidden
Risks" are those matters, rights or claims that are not
shown by the public records and, therefore, are not
discoverable by a search and examination of those public
records. Matters such as forgery, incompetency or
incapacity of the parties, fraudulent impersonation, and
unknown errors in the records are examples of "hidden
risks" which could provide a basis for a claim after you
have purchased the property. In order to protect you
against this possibility, Chicago Title provides
insurance coverage for such claims. This is the second
benefit you receive from title insurance.
How Does a Title Insurance Policy Protect Against All
These Claims?
If a claim is made against your insured title,
Chicago Title Insurance Company protects you by: (1)
Defending your title, in court if necessary, at no cost
to you, and (2) Bearing the cost of settling the case,
if it proves valid, in order to protect your title and
maintain your possession of your property.
Title Insurance Protects Your Asset
Title insurance gives you the assurance that possible
clouds on title to the property you are purchasing -
which can be discovered from the public records - have
been called to your attention that such defects can be
corrected before you buy. Additionally, it is insurance
that if any undiscovered claims covered by your policy
arises out of the past to threaten your ownership of
real estate, it will be disposed of, or you will be
reimbursed exactly as your title insurance policy
provides.
Only One Premium
Unlike other forms of insurance, the original premium
is your only cost as long as you or your heirs own the
property. There are no annual payments to keep your
Owner's Title Insurance Policy in force.
WHY DO YOU NEED TITLE INSURANCE?
To protect possibly the most important investment
you'll ever make - the investment in your home.
With a title insurance policy, you as owner, have an
indemnity contract that will reimburse you for loss in
the event someone asserts a claim against your property
that is covered by the policy.
How can there be a title defect if the title has been
searched?
Title insurance is issued after a careful examination
of copies of the public records. But even the most
thorough search cannot absolutely assure that no title
hazards are present, despite the knowledge and
experience of professional title examiners. In addition
to matters shown by public records, other title problems
may exist that cannot be disclosed in a search.
What title insurance protects against
Here are just a few of the most common hidden risks
that can cause a loss of title or create an encumbrance
on title:
False impersonation of the true owner of the property
Forged deed, releases or wills, Instruments executed
under invalid or expired power of attorney;
Undisclosed or missing heirs; Mistakes in recording
legal documents
Misinterpretations of wills Deeds by persons of
unsound mind
Deeds by minors
Deeds by persons supposedly single, but in fact
married
Fraud
Liens for unpaid estate, inheritance, income or gift
taxes
What protection does title insurance provide against
defects and hidden risks?
Title insurance will pay for defending against any
lawsuit attacking your title as insured, and will either
clear up title problems or pay the insured's losses. For
a one-time premium, an owner's title insurance policy
remains in effect as long as you, or your heirs, retain
an interest in the property.
What this means to you
The peace of mind in knowing that the investment
you've made in your home is a safe one.
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