When is Title Insurance Bought?

Question

I know many of you may be looking at this and shaking your head. But I've been trying to find when in the buying process you would reach out to a title co. and send the money to Escrow. I am assuming it is either once the P&S is signed, Inspection, Negotiation, are both done? The Earnest Deposit is in the Escrow Account once an offer is accepted? And then a larger sum of money is then transferred at what time? How does this work with conventional financing?

To be more direct when do you call an Escrow Company when buying a house, when do you make the first deposit, and when do you officially close w specific funds?

I know I am not exactly the most articulate about this... but I am confused!!

Please explain if anyone knows,

Thanks,

Sam

Tyler Bobo · Answer

It may vary from state to state, here's how it works (usually) in Alaska, and probably similar elsewhere:The Earnest Money is deposited when the offer is accepted. (can be held at the title company or the real estate brokerage) Then you "open title" by sending the contract to the title company (some states have realty attorneys that do some of this, I'm not sure the details for those states) When title is opened the title company doe a preliminary title report, meaning they're searching the title for all the liens and easements and restrictions, etc, and tell you what they're insuring (up to the purchase price) and what they are not.

If you are doing inspections and other due diligence, appraisal, well/septic, as-built, all that gets done in the mean time, if there's a deal breaker in your due diligence period you would get your earnest money back (check with your Realtor... if you're new at this and don't have one, get a Realtor)

The remaining funds for the property come when the deal closes, this would be the cash from the buyer or a lender. And the insurance is actually sold at closing, so if the deal falls through you haven't bought insurance (though there may be a cancellation fee.

So you call the Title/Escrow company when you have a signed agreement, and deposit earnest money at that time.  Good luck.

Sam Giberti · Answer

@Tyler Bobo thank you. Exactly what I was looking for :)