Life of an Escrow Buyer and Seller enter into sales agreement
ESCROW OPENING
Escrow is opened and earnest money deposited Preliminary title report is ordered Preliminary title report received, reviewed, sent to appropriate parties
Application is made for new loan
Escrow officer orders payoff demands, homeowners assoc. info., and any other liens. Taxes reviewed and any other requirements shown on the preliminary title report are addressed
Financing is processed (If applicable)
Loan approval is obtained
Receive and review returned information from the lien holders, homeowners assoc., etc.
Loan documents and fees are prepared by lender and sent to escrow officer
Review file to determine that all conditions have been met Calculate settlement and closing statements, closing documents are prepared
Buyers and sellers sign instruments and funds are taken from buyer
ESCROW CLOSING
Documents are recorded, funds are disbursed, and keys are delivered First American Title Insurance Co. of Oregon ~ 200 SW Market
Rev: 6/15/05
Road Map to a Title Policy Receive and Review Request for Title Insurance from Escrow
Assemble and Review (search) (examine)
Order Courtwork: Divorces, Probates, Foreclosures, Judgments, etc.
Documents in the Chain of Title: Contracts, Deeds, Mortgages, Trust Deeds, Easements, CC & R’s, Others. Map of the Subject Property Original Subdivision Map Tax Printout Judgment Search
Order Lien Search: Cities/Sanitary Sewer Districts
Receive and Review Courtwork Interpret the Status of Title Prepare and Issue Preliminary Title Report (PTR) to Escrow and Designated Parties Receive and Send Copy of Lien Letter to Escrow Creative Problem Solving
Communicate with Escrow
Revise PTR as needed
Receive and Review from Escrow: Survey, Power of Attorney, Trust Agreement, Partnership Agreement, Corporate By-Laws, Affidavit/Indemnity and Documents for Recording and Related Instructions Update and Evaluate The Status of Title Record/Phone “Rechecks” to Escrow Prepare and Issue Policy of Title Insurance
First American Title Insurance Co. of Oregon ~ 200 SW Market
Rev: 6/15/05
What is Escrow? The term "escrow" means any agreement between two or more parties (principals) wherein the delivery of instruments, monies, items of value, or evidence of title to real or personal property are deposited with a 'NEUTRAL' third party (the escrow agent). This agreement contains specific written instructions executed by all parties to the transaction. Other parties may be brought into the escrow by virtue of the instructions and requirements of the buyer and seller, i.e., the lender, lien holders, contract vendors, etc. In order for the seller and buyer to complete the transaction it may be necessary to receive money and documents from these other parties. These other parties will deposit their items of value into the escrow along with their written instructions which confines the items to the escrow until their conditions have been met. The escrow fee is usually split between the buyer and seller but this can be changed by an agreement of the parties.
Taxes and Reserves In Oregon the tax year is July 1st through June 30th. Tax bills are sent at the end of October and are due by November 15th and when paid in full earn a 3% discount. Taxes can be paid in thirds with no penalty. Interest is due on the unpaid taxes at 1 1/3% per month on the 16th of each month. The county, at its option, may start foreclosure proceedings with three years of unpaid taxes. If a property has gone into tax foreclosure there will be an additional penalty due. The seller is responsible for taxes from July 1st to closing and the buyer is responsible for taxes from closing through June 30th. Reserves/Impounds are collected by the Lender to pay taxes for the following year. A common way to estimate an amount needed for reserves is: 1) Divide the current tax bill by 12 to get a monthly tax amount. 2) Count the number of months from the buyer's first payment due date to October. 3) Subtract that figure from 12 and you will have the number of months that will need to be collected and 4) multiply that number by the estimated monthly tax amount. The resulting total will be the total estimated dollar figure for tax reserves. First American Title Insurance Co. of Oregon ~ 200 SW Market St. ~ Portland, OR 97201
Rev: 6/15/05
What is Title Insurance? Title Insurance is an insured statement of the condition of your title or ownership rights to a certain piece of property. A title insurance policy describes your property in detail and states what limitations, if any, there are to your ownership. (For example, you may take
ownership
subject
to
existing
liens
or
encumbrances. You may not own mineral rights or easements may have been granted to utility companies or adjacent property owners.) A title insurance policy provides you with peace of mind. It takes the risk out of acquiring property whose legal history is unknown to you. While there should be no risks in transferring title, they do exist. Through the years your new property may have changed hands many times by way of sale, inheritance, foreclosure or bankruptcy. Each transfer was an opportunity for an error in title to arise. If an error occurred and has never come to light, it puts your title in jeopardy. You could lose your property and the money you paid for it. Even if you successfully defend your rights of ownership, the cost in time and legal fees could be prohibitive. Among the many risks against which title insurance protects you are:
•
Confusion from similarity of names
•
Forged documents
•
Signatures of minors or mentally incompetent persons
•
Mistakes in recording legal documents
•
Undisclosed or missing heirs
•
Fraud
•
Invalid divorces
•
Misrepresentation of marital status
•
Unpaid taxes
•
Clerical errors in public records
•
Unsettled Estates (probate, heirship affidavits, trusts, etc)
First American Title Insurance Co. of Oregon ~ 200 SW Market St. ~ Portland, OR 97201
Rev: 6/15/05
Who Pays for What? NORMAL SELLER’S COSTS
FHA
VA
CONV
CONT
ASSU
FHA
VA
CONV
CONT
ASSU
Real Estate Commission Inspections and/or Repairs Buyer’s Loan Costs (Paid by seller) Tax and Other Prorations Payoff Liens and Encumbrances Recording Fees Escrow Closing Fee (1/2) Escrow Collection Setup (1/2) Title Insurance (Owner’s/Purchaser’s) Attorneys Fees
NORMAL BUYER’S COSTS Credit Report Appraisal Fee Inspections and/or Repairs Loan Fees Mortgage Insurance Flood Insurance Fire Insurance Reserve Setups Tax and Other Prorations Recording Fees Escrow Closing Fee (1/2) Escrow Collection Setup (1/2) Title Insurance (Mortgagee’s) ALTA Endorsements Seller pays full escrow fee on Fed V.A. Loans Lender may require RED indicates Refinance costs paid by borrower
First American Title Insurance Co. of Oregon ~ 200 SW Market St. ~ Portland, OR 97201
Rev: 6/15/05