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14. Escrow is then notified by new lender as to the date in which they are prepared to fund. The loan amount in which the lender will be funding to the escrow company is also verified for final accounting.
15. When all requirements are satisfied by new lender, funds are issued and received by escrow.
16. Title then forwards documents to the County Recorder to be officially recorded.
17. Escrow is now closed, funds are disbursed as instructed on loan documents and escrow instructions

Sellers proceeds are disbursed.

Any refund to buyer(borrower) is disbursed.

Commission checks are delivered.

Closing statements are forwarded to all parties involved.

The Role of Escrow Service and Title Insurance in the Purchase of a Home

The escrow procedure and title insurance combine to facilitate the legal transfer of property and provide the buyer with protection against claims resulting from the history of the property. The title insurance company provides both title insurance and escrow service.

What is Escrow?

The term “escrow” can be defined as putting something into the hands of a “neutral third party”. When buying or selling a home, the “something” is the transfer of ownership of the property. The “neutral third party” is the company chosen to handle the transfer. In Sonoma County it is customary that the buyer choose the title company.

How Does it Work?

The process begins when the purchase agreement is signed by the buyers and sellers. The buyers then make an “earnest money” deposit with the title company to provide the escrow service and title insurance. At this point the escrow is considered to be opened. The escrow officer then obtains all requirements and conditions of the transaction from the principals and from the lender if a loan is involved.

What is a Preliminary Title Report?

Also at this point, a preliminary report on the property is ordered and produced. This report is based on a search of the public records of the county, such as the tax collector, county recorder and assessor’s office. The report will list any liens, taxes, easements, encumbrances or title defects on the property found in the search. These matters will be listed as exceptions from the coverage of the title insurance policy and will remain exceptions unless they can be released or eliminated prior to the transfer of ownership. A copy of the report will go to the buyers, sellers, their agents and lender. If the home being purchased does not include real estate, such as a mobile home, no preliminary report is issued as no land is involved.

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