In California, when the Purchase Agreement is ratified, it moves to a Title Company to execute the contract. The Title Company and the Escrow Officer play a very important role in the formal closing of the sale. Today I’m going to talk about what a Title Company actually does.
Title Companies conduct searches to see if there are any existing claims against the property. They prepare title insurance to protect the Lender or the Owner on any existing claims or lawsuits against the property. Most importantly, the Title Company helps the Seller convey the Title to the new Buyer so that they can legally possess the home. The Title Company also maintains the escrow account for both the Buyer and Seller with the Escrow Officer being the neutral third party that executes the purchase agreement to the letter of the contract.
Think of them as the traffic cop who makes sure the monies going in and out of escrow are accurate and accounted for. Any changes to the purchase agreement during the escrow period will need to be in writing and agreed to by both parties before the Escrow Officer will execute those changes. And finally, the Title Company will get the necessary information to the County so the Title can be conveyed. Once it has been recorded, escrow has officially closed and the property has a new owner.
Check with your REALTOR to find out what the customary practices are in your County as to who pays for Title and Closing.
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