Title Insurance
When you buy a home, a title company examines the chain of titles (previous owners) to insure that there are no problems with obtaining clear title to the property. Parties other than the current owner of the home may have rights to it for things such as mortgages, liens due to unpaid taxes, lien claims to those who the owner owes money, etc. As a new owner, you may know nothing about these risks, but you are still vulnerable to such claims on your property. A deed is not sufficient protection. That's why title insurance is necessary.
It is very common for title companies to also handle the escrow portion of the transaction, meaning they serve as a neutral party to exchange funds and make sure both parties adhere to the agreed upon terms of the contract.
The escrow agent conducts the closing and is often affiliated with the title insurance company. Their job is to ensure the home buyer obtains a clean title, the lender obtains a good mortgage, that the costs of the transaction are paid, that the seller's mortgage is paid off, and that the seller receives their proceeds. The escrow agent prepares a closing statement that outlines what the required funds are, who's paying and where the funds are going toward. They will not disburse funds until they can guarantee that the above noted items have been taken care of.
The escrow agent conducts the closing and is often affiliated with the title insurance company. Their job is to ensure the home buyer obtains a clean title, the lender obtains a good mortgage, that the costs of the transaction are paid, that the seller's mortgage is paid off, and that the seller receives their proceeds. The escrow agent prepares a closing statement that outlines what the required funds are, who's paying and where the funds are going toward. They will not disburse funds until they can guarantee that the above noted items have been taken care of.
