REAL ESTATE ESCROWS AND TITLE INSURANCE

A real estate escrow is a frequent part of the purchase and sale of real property. It allows a disinterested third party to hold funds and titles from the buyer and seller. At the close of the transaction, if all requirements of the sale, transfer or lease have been met, the Escrow Holder delivers the written document, evidence of title or other thing of value to the appropriate parties involved in the transaction.

A real estate escrow is meant to provide a disinterested third party who can act as a "clearing house" for concluding a real estate purchase and sale.

In order to start a real estate escrow there must be a binding sales contract between the buyer and seller. This is given to an Escrow Holder chosen by the parties. For example, a Deposit Receipt, an Agreement of Sale, an Exchange Agreement or mutual instructions signed by both the buyer and seller is handed to an Escrow Holder after being signed by all parties.

Most escrow companies, title companies, attorneys or banks may act as an Escrow Holder. Your real estate broker or agent can help you select an appropriate Escrow Holder.

Generally the Escrow process begins with the following items:

Normally the fees for a real estate escrow are divided in such a way that the seller is responsible for such things as the title insurance fee, documentation charges and notary fees for instruments transferring the property to the buyer; documentary stamps on the deed; the real estate broker's fee and one-half of the Escrow Holder's fee. The buyer is usually responsible for documentation and notaries fees for instruments in favor of any lender, the recording fees for the deed in favor of himself and the deed of trust in favor of the lender, and one-half of the Escrow Holder's fee. However, these fees may be negotiated in the agreements between the parties.

Many costs paid by the buyer and seller, such as title insurance fees, are based upon the total sales price paid for the property being sold. The fees charged by the Escrow Holder for his or her services are negotiable and are based upon the sales price. Recording fees normally run about $25.00 each for the buyer and seller. It is suggested that you contact several Escrow Holders in your area with the agreed upon sales price to obtain an estimate of the fees and costs involved.

Title insurance is an insurance policy issued by a title company licensed in the State of Nevada which is intended to protect the purchaser of real estate against loss if the title to the property is flawed.

A title report is a report which discloses the current ownership and liens relating to a particular property. This report is normally prepared by a title company prior to issuing a title insurance policy. A preliminary version of this report is known as a preliminary title report.

Unless required by a lender of money, there is no requirement to buy title insurance. However, it is recommended that you do purchase title insurance unless you have fully investigated the condition of title and are willing to accept the property with the liens and restrictions shown.

While simple real estate transactions may be handled without a lawyer, you may want your own attorney to clarify any terms which are unclear to you in any documents you are being asked to sign. You may also need sophisticated tax or real estate advice for more complex real estate transactions. Simply e-mail or call Jeffrey S. Posin & Associates at (702) 396-8888 and let us help you with all of your legal needs.