Escrow and Title

As part of the purchase agreement, you and the seller have agreed on shared service providers (i.e. escrow and title). Your advisor will have covered this during the contract and provided suggested providers or you have left it to the seller to choose these two providers or you have chosen one and left it to the discretion of the seller on the other. Your advisor will be able to talk about reputation or known issues regarding any of these that should be of concern and part of the counter-offer in negotiation.

Title insurance is important as you obtaining an owner’s policy, the title insurance company is ensuring that you have clear title to the property. If there are any problems later, you can always go back to the title insurance company and have them clear it up. Since it is customary for the seller to pay for the owner’s policy, they have an interest in which company is used.

As a buyer, on the other hand, you will also have to pay title insurance for the lender’s policy (assuming the purchase is financed with debt). The lender’s policy insures your mortgage lender that there are no liens or judgments against the property and that the mortgage will be in first position.

Termite and Pest Inspection

As part of your offer, you may require a termite and pest inspection. This company not only inspects for termite damage and pest infestations, but also inspects for dry rot and water damage, among other things. The company that performs the inspection is important to you as a buyer, because you want to be sure they do a good job. Typically, the buyer will pay for the home inspection and the pest inspection can land on either side of the fence between buyer or seller paying (again, all negotiable). As a buyer, you want to choose who is used for both of these in order to ensure you select a reputable and licensed professional. Your advisor will be able to provide vendors that you can choose from.