Title and Escrow are two separate services typically completed by the same company that are utilized in the transfer of real property such as a home, land or commercial enterprise. These two services work hand in hand to successfully transfer property from one owner to another. When a “Sale Agreement” is created in Oregon an Escrow is opened at a local provider such as those listed below. These folks “open” escrow and a process ensues as this company serves as a neutral third party who “executes” those activities necessary to transfer property from the seller to the buyer based on the instructions in the sale agreement and any addendums that define the terms of the agreement.
When we use the word “title” it’s often in the context of who’s on “title” of a particular property. It refers to the person or entity which owns the property or is in “Title”. By being in “title”, the owner has the legal rights to own, use and dispose (or sell) of real estate. When Escrow is opened during a transfer of property, the “Title” department of the Escrow company will investigate the “Chain of Title” to ensure that they can transfer the property free of encumbrances (liens, other owners, etc.) that might “cloud” (keep the new buyer from having a clear ownership) the title. In most real estate transfer transactions, the title company will do this title search to prepare to issue a policy from the current owner of the property to the new owner that ensures their financial position in the property free from other’s rights to claim it as their own.
However, there will always remain a few “encumbrances” that the title company does not ensure against such as real estate taxes, easements on record, etc. A preliminary title report will be sent to both the buyer and seller so they can review it and make sure that they are satisfied with the condition of the title. At the end of the Escrow period, the Title company issues the policy to the buyer, which is typically paid for by the seller. If a buyer is using a lender, then the lender may require that the buyer purchase a title insurance policy that protects their interests as well and is typically paid for by the buyer.
The work that goes into this investigation is anything but simple, and it may take some time. To “clear” a title – that is, verify title ownership – there has to be written proof of the investigation and verification of the ownership history. This work is done in what is called a “title plant.” This is the place where all of the ownership records for a county are housed in order to complete the process.
The word “escrow” refers to a process by which a neutral third-party receives instructions, monies, ownership deeds and other miscellaneous items during the period when a buyer and seller are completing all of the necessary steps to transfer a property from a seller to a buyer. In order to do this they will collect information from both parties, request pay off amounts of any existing mortgages, work to clear items clouding the title and work with buyer and seller to sign all necessary documents.
They also work with any lenders involved and once all funds are received and all parties are ready, they will send the appropriate documents to the county where the property is located to have the documents that transfer “title” to the new owner recorded. Recording is the process that takes legal documents and adds them to the county’s records. In the US, it is the county’s responsibility to keep track of individual property owners within it’s boundaries. They use these records to determine who is responsible for paying the coming taxes or any assessments they charge for things such as roads, sewers, etc.
Once notified of the recording (which is the moment the seller and buyer exchange ownership and is known as the moment of “closing), they disburse all funds to anyone who had an interest in the property such as the seller’s mortgage company, HOA’s, etc and the balance of the funds to the seller. Their services are invaluable and they seamlessly handle many of the activities needed to make the transfer go smoothly while buyers and sellers and their agents are taking care of inspections, repairs and lender items. Below are the local Title & Escrow companies in our area.