Title & Escrow Questions and Answers 100% Pass

Title & Escrow Questions and Answers 100% Pass Title & Escrow ✔✔Escrow and title insurance typically go hand-in-hand together in real estate sales or financing types of transactions. Many times, a title insurance comp ...

Title & Escrow Questions and Answers 100% Pass Title & Escrow ✔✔Escrow and title insurance typically go hand-in-hand together in real estate sales or financing types of transactions. Many times, a title insurance company will offer escrow services as well, or escrow can be offered by a separate company dedicated solely to escrow functions. Escrow is a designated and neutral third party firm that collects money and paperwork from all sides in the real estate transaction prior to making any necessary payoffs to the sellers and existing lenders concurrently at the closing and clear title insurance coverage. What is title insurance? ✔✔It is a contract obligation where one party agrees to reimburse, indemnify, or protect against any potential financial losses or damages to the subject property which may occur under the designated terms and provisions included within the title insurance contract. differs from life or casualty insurance such as car or health insurance, which usually insure against future events such as an automobile accident or health problems in one's older years. Insures against past events or histories Title insurance, in turn, typically insures against past events or histories such as problems associated with the following issues: ✔✔"Chain of title" ownership or transfer histories Zoning and usage issues Improper easements and encroachments such as a neighbor's fence being improperly built on a person's yard Mistakes such an incorrect property addresses Forgery and fraud where a previous seller's signature was signed by someone else without his or her permission The two main types of title insurance options available to property owners nationwide: ✔✔Standard Coverage Policy Extended Coverage Policy Standard Coverage Policy: ✔✔It is usually the less expensive title insurance option primarily since it offers fewer insurance coverage benefits. The insurance risks are usually limited to certain types of off-record risks such as fraud in the chain of title, defective past recordings, and the competency issues of past owners. Mechanic's liens, tax liens, judgments, and other defects against the property that a basic search of public records may uncover are generally covered by this policies. Extended Coverage Policy: ✔✔This more expensive and extensive type of title insurance policy provides the same insurance coverage benefits as a standard policy while also offering protection against past events or histories that aren't as easy to discover without physical inspections or detailed verbal inquiries such as unrecorded mechanic's liens, leases, or seller-financed wraparound mortgages or land contracts that can "cloud" up the clear title history with questionable ownership interests still in place. insures against many of the items excluded in the standard policy. Lenders require their mortgagee policies to be extended coverage policies. Escrow ✔✔Escrow officers and firms can interact the most with parties or businesses as compared with any other people involved in the transaction, including the agents and principals. some of the basic functions of an escrow officer involved in a residential or commercial real estate sales transaction: ✔✔Work with all parties in the transactions including buyer, seller, and agents Collects the necessary earnest money deposits Orders the preliminary title report and examination for the subject property Orders the appropriate title insurance requested by the parties Coordinates the hazard insurance coverage with the home insurance agent Gathers the third party inspection reports (e.g., termite and pest, home inspection) Orders the demands for payoff from the existing lender(s) and owners Requests copies of the buyer's new vesting information to be placed onto title at the closing (i.e., John Smith, a single man holds title 100%) Creates one, two, or more updated versions of escrow instructions that are primarily based upon the submitted and signed purchase agreements, counteroffers, and any subsequent addendums Gather all tentative closing cost information from the new lender, buyer, seller, listing agent, buyer's agent, and any third parties with unpaid bills such as home inspectors, pest control, and appraisers Prepare all closing documents Complete the closing concurrently with the payoff of any existing debt on the subject property, and assist with the transfer of title to the new buyers Collect and disburse all monies owed Complete all post-closing details title closing ✔✔is the culmination of the real estate transaction. At the title closing: ✔✔The buyer completes his or her financing arrangements (referred to as closing the loan). The seller transfers the title. Both the buyer and seller pay the necessary taxes, fees and other charges. Who Attends Title Closing ✔✔Buyer - Pays for the property and receives clear title. Seller - Conveys the property and receives payment. Closing agent - Prepares all the documents that need to be signed at the closing, including the actual settlement statements that show all the debits and credits assigned to the buyer and seller in the transaction. Others who may attend the closing are: ✔✔Attorneys for the parties - Examine the documents to ensure that the best interests of the clients are being met Lender representative - Examines documents and makes sure the property getting the loan has clear title Real estate agent - Collects commission Title company representative - Reviews documents and answers questions about the title Closing Documents ✔✔Deed Survey Other Documents Deed ✔✔The deed is the most important document at closing, since it transfers the property to the purchaser. The deed is usually prepared by the seller's attorney, who uses the old deed as a template to prepare the new one. Survey ✔✔The purchaser, purchaser's lender, or t