Escrow and Title Services Key Terms

Gaining a better understanding of escrow and title services key terms

Escrow and title services key terms will help both buyers and sellers understand important real estate transactions. Home sales rarely occur without the help of knowledgeable personnel at an escrow and title service. Most home sales involve the transfer of thousands of dollars, and the seller and the buyer are usually strangers. Individuals transferring these large amounts of money or the title to a home could suffer huge loses without a disinterested third party to guard the valuables while they finalize the deals. Personnel at an escrow and title service work as this disinterested third party.

Escrow

Escrow services are available for the safekeeping of large sums of money or valuable property. The officials at an escrow service safeguard the transfer of the monies or valuables when transferring ownership from one party to another. The escrow service has no interest in the transferred items except to make sure that officials complete the transaction legally, completely and properly.

Conveyance

Real estate agents and lawyers handle small cottages and large estates for their clients. As they ensure that they handle the large funds properly, they must also make sure that they transfer and record ownership of properties. Conveyance is the term used to describe the transfer of property from one party to another.

Deed of trust

A deed of trust is an important document that contains the conditions for a mortgage on a home. The mortgage lender keeps the original deed of trust until a customer makes the final payment. A deed of trust is a legal document filed with official land records, usually at the county courthouse.

Earnest money

Buyers show their serious intent to buy a property by providing earnest money. The amount of money differs depending on the value of the property, and a buyer might forfeit this amount if they back out of the deal. The buyer usually places the earnest money in an escrow account until the deal is complete.

Impounds

Property taxes and insurance premiums are impounds that are held by an escrow and title service to cover for the lender in case the borrower does not pay these important expenses. The escrow and title service pays these expenses to avoid any confusion and to ensure that the proper agencies receive the payments on time. Borrowers can make arrangements, usually for a fee, to avoid placing these funds in escrow accounts.

Quit claim

A quitclaim is a transaction that an individual files to give up their interest in a property. Family members are often the people who use a quitclaim to give up their interest in a property to another member of their family. The beneficiary of a quitclaim assumes all of the responsibility for the property including taxes, liens and other encumbrances.