When to Call Title vs. Escrow

Title vs. Escrow

“Real estate is a complex commodity. Owning real estate is a precious freedom. There are more rights and laws that govern real estate than any other item of value.”  – Chris Rieland, CEO Pacific Northwest Title

What is Title

Title, in Real Estate, is designed to protect the concepts of ownership rights for a property.  A deed is an official written document that declares a person’s legal ownership of a physical property.  When the team at Pacific Northwest Title begins the process of working on a transaction, they begin with a title search for the property which can disclose all, if not more, of the following:

–  Who owns the property (holds the deed)
– Legal Description
– Taxes/ Special Assessments
– Liens
– Easements
– Covenants, Conditions and Restrictions
– Heirs to the property (if any)

Once the title search has been performed all potential risks to the transfer of ownership, if any, are brought to the attention of the Real Estate Agents and the parties they represent.  Once a remedy has been made the Title Team can move forward with securing Title Insurance.  There are two types of Title Policies and three types of Coverage: a Basic Lender’s Policy, a Basic Owner’s Policy, and an Extended Owner’s Policy. A Lender’s Policy or Basic Lender’s Policy offers protection to the lending party, mortgage company for example, in the event their interests in the property are endangered.  The Owner’s Policy or Basic Owner’s Policy protects the owner in the event of an unforeseen circumstance which could affect their right to ownership of the property.   An Extended Owner’s Policy cover’s additional items such as clouds on titles related to old foreclosures, a previous owner’s failure to obtain required permits, unrecorded easement claims, survey mistakes, structures encroaching on adjacent property, unrecorded mechanic’s liens, and a number of other potential issues.   Title Insurance is a one-time purchase geared towards protecting the lender and owner’s physical and financial interest in a piece of real estate. In the event an ownership rights issue arises it is the responsibility of Pacific Northwest Title’s Underwriters to alleviate the situation or make restitution.

 What is Escrow

Escrow is a closing process in which a neutral third party is requested to act as an Escrow Agent, or Settlement Agent, to coordinate the many requirements of closing a sale between a Seller and Buyer. The Escrow Agent holds legal documents and money on behalf of the Seller and Buyer and handles them according to the terms and instructions contained in the Purchase and Sale Agreement.

As a neutral third party, the Escrow Agent does not represent anyone in the sale transaction, including other third parties such as lenders or real estate agents. The Escrow Agent has a fiduciary responsibility to use the utmost care to protect the money and interest of the Seller and Buyer. However, Escrow Agents cannot give legal advice as the to the manner in which the documents or terms of the sale affect the parties. They do not resolve disputes or negotiate on behalf of the parties.  Their role is to follow written consistent instructions provided by the principal parties of the transaction. The Escrow Agent will direct any party who may have questions regarding the terms of the transaction to seek legal advice from an Attorney.

Requirements for closing are determined in the Purchase and Sale Agreement and are in accordance with all Real Estate Law Regulations in the State of Washington.

Who should you call?

Title and Escrow work together to provide the maximum protection against any risks throughout the purchase and sale of a property and the buyer’s right of ownership of that property.  Since the two work so closely together it can be difficult to determine when to call which department.  In Washington State, most escrow companies are also title insurance companies, Pacific Northwest Title is no exception.  Below is a visual tool to help you determine which department to contact with questions.

Escrow (Primary contact)
Earnest money questions
Loan Documents and funds
Scheduling signings
General transaction process questions

Title search questions
Underwriting questions
Questions on Final Policy
Duplicate Final Policy (if lost)

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