First Colonial Title & Escrow

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Why use a Title Company?

In a real estate action, the title company plays an important role to ensure the smooth transfer of the property from the seller to the buyer. As an independent third party to the transaction, the title company verifies that title to the property that is being transferred is owned by the seller and the seller has the right to transfer the property. Once verified, the title company insures the title through the issuance of title insurance insuring against claims that may be made against the title after the real estate transaction is completed.

The title company also acts as the escrow agent – maintaining monetary deposits until such time as those deposits are released in accordance with the terms of the contract of sale and the closing agent – preparing and assembling all necessary legal documents to facilitate the transfer of the property from the seller to the buyer.


What is a Title Search?

Title to real property is the legal right of ownership to the property that you intend to purchase. Prior to the transfer of ownership, a search of the title to the property is conducted to verify the seller owns the property which you contracted to purchase and identifies encumbrances against the title that may affect or otherwise challenge ownership interest in the property. While encumbrances exist against the vast majority of real property, it is vital to fully understand how such encumbrances could affect your use of the property prior to purchasing same. Whether a restrictive covenant, easement, right-of way or lien, a title search identifies the encumbrances against the property. For an encumbrance that is deemed objectionable by you or your lender, e.g., unreleased mortgage, unauthorized encroachment by an adjacent property owner, the encumbrance will need to be cleared from the title prior to settlement.

Why is Title Insurance Important?

Unlike automotive or health insurance, which protect you from events that could occur in the future, title insurance protects you from events that have already taken place and which may only come to light after you purchased your dream home. The most common claims against a title are for unpaid property taxes, improperly recorded documents, fraud, forgery, liens, encroachments and easements. Lenders and buyers alike purchase title insurance to protect their respective investment in the property, affording each the peace of mind that their investment is protected.

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What is Escrow?

An essential part of any real estate transaction is the exchange of money. “Escrow” is a legal agreement in which the title company holds money until the buyer and seller meet certain conditions as specified in the contract of sale. When submitting to the seller a contract of sale, the buyer tenders a monetary deposit to be held by the title company while the buyer and seller fulfill agreed upon conditions; conditions that may include a home inspection or the procurement of a mortgage on the buyer’s side and the release of a lien on the seller’s side. The length of the escrow period will be decided upon by the buyer and seller, though 60 days is the average period. Once all conditions are satisfied and the escrow period is closed, the transaction goes to closing at which time the escrowed monies are released in accordance with the terms of the contract of sale.

Why is Escrow Important?

You may wonder why it is necessary to go through an escrow account and not simply put in your money in another traditional savings vehicle. An escrow account protects both the buyer and seller and offers a convenient option for you to pay off your taxes, insurance, liens, or mortgage balance, removing your responsibility from paying these important bills and placing it on the title company.

Have a Title Issue That Needs To Be Resolved, Contact The Experienced Attorneys of
Oliveri & Larsen
Attorneys at Law

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