The terms "title", "escrow", and "settlement" are often used interchangeably to refer to a company that will "close" the sale of your home - or finalizing the sale. So what does it all mean? For most buyers, refinancers and sellers, what matters the most is that the closing happens quickly and without issues. Buyers want to move into their new home, refinancers want their cash-out or new rate, and sellers want to receive the proceeds of the sale. But unless you are a real estate professional, you probably do not know all the things a title company is responsible for doing - and all the things that can go wrong!
"Title" refers to an ownership in real estate - the documents that show who owns a home or parcel of land. When our team at Pike Title does a title search, we gather all the documents and records that relate to the title of a property that are recorded in the local courthouse. We carefully review those documents for evidence of ownership, and issues that might affect ownership, then insure the title with title insurance. Title insurance protects lenders and owners from unknown issues that may affect the ownership of a home. Title issues come up in a many different ways and affect ownership in land. Sometimes the issues cannot be discovered by a title search, which is why insurance is important.
"Escrow" is the process of collecting funds from parties to the transaction, like the lender, buyer, and sometimes the seller. The money may be for the purchase of the home, realtor fees, lender fees, closing expenses, termite inspections, taxes, and many other necessary expenses. When our Lynchburg title company collects money for escrow, it holds it in a separate escrow account until the sale is complete, the documents are signed, and the deed and deed of trust are recorded in the county courthouse (i.e. after "closing"). Once all of this is accomplished without issue, the sale is final and we disburse the funds to each person or business entitled to receive them. All of these collections and disbursements are itemized on a settlement statement called a "Closing Disclosure" for a detailed record of each disbursement.
"Settlement" refers to finalizing a real estate purchase or refinance, including gathering signatures from all necessary parties, notarizing those signatures, collecting and disbursing money, and recording land documents in the courthouse.
Our Lynchburg title company conducts all the necessary steps to close, settle, and finalize the purchase of your home. We do so with expertise and efficiency.