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Flashcards in Principles 10 Deck (13)
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1

Escrow

-The possession by a neutral third person of money, a written instrument, evidence of title, or another thing of value that is received from one party to a transaction for delivery to the other party to the transaction on the performance of one or more conditions at a specified time.

2

Close of escrow

- the escrow agent provides each party a settlement statement that itemizes all receipts and disbursements.

3

2 requirements for a Valid Escrow

-Binding Contract
-Conditional Delivery

4

Escrow officer

Someone employed by an escrow company or escrow holder to handle escrow transactions.

5

Proration

-is the allocation of property expenses and other charges to seller or buyer.
-expenses that are prorated include: rents, taxes, insurance premiums, and interest on loans

6

Abstract of title

-Lists every recorded change of ownership or claim on the property being examined
-accompanied by a lawyer’s opinion of title, which comments on the present validity of any claims of lien or ownership

7

Standard policy

-assumes that the policyholder is able to inspect the property before purchase and determine how the land is being used and by whom
-covers FRIC: forgery, recording defects, improper delivery of a document of title, and incapacity of the grantor

8

Extended-coverage policy

-that is intended primarily for the benefit of lenders.

9

Preliminary report

-Describes the property and names the owner of record
-indicates any outstanding taxes, bonds, and assessments
-identifies any conditions and restrictions on the property
-lists any recorded encumbrances or other items that will be exceptions to the title insurance coverage.

10

North vs. South

-Northern California, buyer pays for owner’s title insurance policy
-Southern California, seller pays for owner’s title insurance policy

11

Interpleader

-legal action taken taken by escrow holder to have a court determine the rights of the parties because the parties cannot agree on terms

12

North vs. South handling escrows

-Northern California: escrow is typically handled by the title insurance company

-Southern California: separately licensed escrow companies often are used, and financial institutions also performs many escrow

13

North vs. South escrow instructions

-Northern California: practice unilateral escrow instructions

-Southern California: practice bilateral escrow instructions