The Highland Title + Escrow professionals know title and escrow; after all, it’s in our name. What do those two words mean to you as a participant in a real estate transaction? You will hear the terms many times in your journey so today, let’s share some knowledge regarding their importance.
Before we go any further, let’s take a quick step back. A title company is an important part of any real estate transaction, but for the most part, people don’t really know what we do. We are a step in the process that is factored into your closing costs, and that is usually the extent of what people know. We are really so much more.
There are two essential pieces of the transaction that we complete:
- We ensure that the buyer is getting clear title to the property. (Just a note…a title is the legal term for ownership. You cannot hold ‘title’ in your hands. Your deed is the physical component of your ownership…the actual document that transfers ownership from one party to another.)
- We disburse the money that the buyer has received from the lender to record the documents at the courthouse, and then, we disburse the remainder of the loan proceeds to appropriate vendors and entities that have provided services pertaining to the closing. That’s escrow.
Why is it so important to ensure that you are receiving a clear title? It’s proof that your property belongs to you and you alone. Title ownership can often have a history dating back hundreds of years, and over those years, any number of people could have owned the property. It’s important to order a title search, review, and confirm clear title each time because it’s required by the lender and a necessity for the incoming owner. For example, an heir of a former property owner could come forward years down the road, or an error could be made in recording the deed at the courthouse. Each of these are potential title issues that could affect your homeownership.
So…we’ll review the history of the title by examining the Land Records. We’ll review the survey should you elect to have one done, and we’ll make sure that you are getting a good and marketable title that proves your property belongs to you. We also want to ensure that if you choose to sell your property in the future…it’s yours to sell. We would love to see you again when that time comes, but regardless, we want our work to help you move forward seamlessly so your sale is quick and easy.
On the escrow side, the buyer makes an offer, gets a ratified contract and agrees to hand over a certain amount of earnest money (also known as a ‘good faith deposit’). It represents your intention to buy the property. As a neutral third party, we, the escrow agent, will hold that earnest money. We’ll coordinate with the lender about the numbers for settlement; these will include our charges, taxes, HOA dues, etc. All of these will be put into the ALTA Settlement Statement and the Lender’s Closing Disclosure so the buyer knows how much money to bring to settlement and the lender knows how much money will need to be wired to us for settlement. The lender wires the money to us, and the buyer wires or brings their portion of the money to us. We’ll hold that money in escrow. Once the closing occurs, the buyer will come in to sign all of the documents, and the seller will do the same.
At Highland Title + Escrow, we serve the DMV area, and there are some variations in the jurisdictions with regard to recording and disbursement. In the DC and Maryland area, as soon as everything is completed, we will disburse the funds to all of the parties involved. In Virginia, we have to record everything at the courthouse before we can disperse the funds as needed. Ultimately, we need to be able to show that every dollar…down to the penny…that went into an escrow account is dispersed to appropriate parties for every transaction we do. (We are audited on this periodically.)
We enjoy sharing what we know when it comes to what occurs every day here at Highland Title + Escrow. Transparency is important to us so feel free to ask us any questions by calling (703) 723-3300, or click here. We look forward to working with you on your next transaction.