You would think that working in the field of real estate for 22 years I would know the role a title and escrow company play in a transaction inside and out. I am a constant learning sponge that loves to continue educating myself in this ever-changing business. I am thankful that title and escrow companies are one of the constants I can count on in real estate.

A title company is an entity that provides services to buyers, sellers, developers, builders, and others that may have an interest in a real estate transaction. The title company makes sure that when transferring title this process is done efficiently whereby a “clean title” is transferred. Title insurance, which is different from other types of insurance, makes sure to examine risks prior to ownership is transferred. Title insurance, as included in the policy, may protect you if someone is claiming to have access to your property, or possibly an individual is claiming that money is owed to them based on a previous lien on the property. These claims should be addressed by the title officer whereby additional research can be done.

Terry Harwell, Operations Manager~ East Bay and Central Valley Branches ~North American Title/Doma Insurance Agency kindly shares the following information. Title Companies search the “Public Records” for Liens, Encumbrances and Defects in Title to Real Property, whether it be Residential, Commercial or Agricultural Land. The information gathered is what is used to issue a Title Insurance Policy to Owners/Lenders to insure against any losses that they may incur from the failure to report these items. There can also be losses for liens on the previous owner which would also be a lien on the property even after the previous owner has transferred the land to someone else. Title Companies also ensure that the interest of owner transferring Title to the property is fully disclosed to the buyer and that it is fully conveyed per the terms of the purchase agreement to the buyer. The cost of title insurance is nominal when compared to the thousands of dollars a buyer could lose without this coverage.

Bottom Line:

Just like any other type of catastrophic insurance such as health insurance, car insurance and life insurance, when purchasing a home, it is paramount to have title insurance on your home. For me personally, I like knowing that I have items in place that take on the risk that I can’t control. I certainly sleep better at night knowing that I have my affairs in order.

• Donna A. Baker, CRS ABR SFR CDPE is the Broker-Owner of At Home Real Estate Group selling real estate for 21 years. Her memberships include National Association of Realtors, California Association of Realtors, Certified Residential Specialists, Central Valley Association of Realtors, Accredited Buyer’s Representative, Certified Distressed Property Expert®, and Short Sales and Foreclosure Resource. In addition, Donna teaches monthly at the Central Valley Association of Realtors New Realtor Member Orientation and serves as the Chairman for the Tracy Real Estate Marketing Council and as a Board member for the McHenry House a local rehab shelter. Donna has lived in Tracy since 1989 with her patient husband Tom of 32 years and has two awesome children, Trevor and Ally. Contact her at donna@donnabaker.com.

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