Escrow process, also called the escrow closing, is one of the full complication in real estate which people does not understand, the closing occurs in the between the time when the seller is accepting the agreement on the purchase and when the buyer gets the access to the new house or building. The days are seen to last in between the 30 and 60 days but can be fewer days if the buyers pay the all the cash before. The time gives the buyer humble time in which he or she will be busy working with the contracts, such as hiring inspectors to report if there is negotiation on anything such as repairs on which they can decide whether to cancel the contract depending on the inspects problem got in the house. (Farkas, 2017)
At this time also the bank can be busy, where they can be reviewing your loan statement. In the process, there are the escrowed rent, title agent or even the escrow company, which is a third party helping the buyer and the seller in exchange for the money with the property. There are the escrow instructions which advises how the agent can handle or even care some of the relevant items.
Some of the things the agents do are like, holding if the buyer earnest check until the closing date, he or can order for the title such, can even hold any money lent by the bank to the buyer, can obtaining and even hold a title for the seller until the closing date. The escrow closing is when the deal is finished, and every party the seller and buyer is comfortable with each other. In short, this is the last day in which the final papers are signed, and the money is given to the new owner. The closing is advantageous to all parties, as they are the witness, and gives the grace period for the bargain, but more in more. It is advantageous to the buyer as he or she has a humble time of bargaining, inspecting and also filing the entire legal document showing he or she now owns the property. (Summers, 2005)
The second term is the mortgage, which is a debt instrument; the instrument is secured by collateral of some real estate, where the borrower is subject to pay with a predetermined set of payment. They are largely used by the individuals and also business to make a large real estate purchase, which is without paying the full value of the purchase up front. The period can be in years in which he or she can spend the loans, which is plus the interest until he or she finishes owning the property free and clear. The mortgages can also be called lines against property or even claims on the property. Moreover, if buyer seems to stop paying for it, the loan lender can foreclose. For example, real estate on residential, housing, the home buyer can pledge him or her to the loan lender. The bank can claim the house if the buyer defaults on paying the mortgage. Whereby in case it happen a foreclosure, the bank can evict the tenants and sell the house, in using the income from the sale to clear the mortgage debt. (Muzumdar, 2011)
A mortgage can be fixed, where he or she pays the same rate in the life of the loan, which can be in 15 or even 30 years term. There is also the adjustable rate mortgage, where the initial rate of a fix, but it later fluctuates with market interest. Mortgages are beneficial to the buyers, and the lender, as the buyer can own property without full money, but by giving up his o her property. Also, the lender has advantages as the bank will earn profit from the buyer when he or she pays the interest while repaying the loan. Mortgages can also be disadvantageous as the buyer can default on where he or she can lose the property he or she has pledged.
The third term is the deed of trust, also called a trust deed, is the legal title to the real estate which is transferred to a trustee, where he or she holds as a means of security in case of a loan or debt I between the borrower and the lender. There is the equitable title which remains with the borrower. Here the borrower is the trustee while the lender is the beneficiary. Here as the lender give the borrower money to buy some property, where the borrower then tenders the money to the seller. The seller hence gives or grants the deed to the borrower, where immediately the borrower gives it to the trustee where it is held by the lender of the beneficiary. In most case, the escrow holder is used in the process to hold the deed until the closing to easily rescind if one party is unable in completing its part of the deal.
The different of the deed of trust with the mortgage it is that deed is seen evolving in at least three parties, where the third pay is seen holding the legal title, but in the mortgage, the borrower gives the legal title directly to the lender. But in both cases, the equitable title remains with the borrower. Both of them are security which is in the form of conveyance, as the legal title must be surrendered.
Here the lender is the beneficiary, as he is the one being secured for its lending the money to the borrower. If the borrower is not able in repaying, the legal title can be given to the lender where the borrower seems s to lose. Its disadvantages it’s that it has many parties included in it which are also payable for the work they do, as they act as the witness. (GR., 2003)
The fourth term is the warranty deed, this type of deed, is seen to guarantee the seller that he or she is holding a clear title of the piece of the property and it gives him or her right to sell it to the grantee who is the buyer. The difference between this deed and quitclaim deed, it is that the seller does not seem to guarantee if he or she is holding the title piece of the property. The general deed gives the grantee the security of any title defects which may arise at any point in the time, which extend back to the original property owner. There is the special warranty deed, which secures grantee only on title defects which may rise from actions or even omissions of the grantor. This deed also gives the full description of the property and also asserts that seller is the owner and has the right of fully transferring and clearing title of the property.
The warranty deed, it gives the right of property to be transferred from one person to another, as they are legal titles. They are also the source of strong guarantees, as the warranty did the buyer the best security of if he or she owns the property and can legally claim it back if anything may arise in between. The deed guarantees the seller legally owning the property and there is nothing against him, or she can prevent him or her from selling the piece of property. It also has the advantage of; it helps in assuring the lenders, it plays a vital place during the buying of the property, as it is seen offering lender assurance of the legal titer is free and clear it has nothing closing it.
Hence it reduces chances of loss in which the lender can face when he or she has lent the money to purchase the property. The warranty deed is advantageous to both the buyer and the lender, as they can claim back the money if an issue arises in where they only have to provide the legal title to prove they legally obtained the property. (What Is a Warranty Deed?, 2017)
References
Farkas, B. (2017). Escrow and Closing in Buying or Selling a Home. Lawer.com .
GR., C. (2003). Mastering Real Estate Principals. . 371.
Muzumdar, P. (2011). Effects of zoning on housing option value. Journal of Business & Economics Research. Apus Library , 41-48.
Summers, N. (2005). Case Study in Real Estate Appraisal: Temecula Olive Oil Company. Apuc Libary .
What Is a Warranty Deed? (2017). Legal Nature .
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