When selling real estate, most buyers and sellers in my locale of Northern California hire an escrow company to handle the escrow and also provide title insurance on the transaction. In other areas, the escrow and title companies could be separate, and an attorney could also handle an escrow.
Title companies are third-party to a transaction and facilitate the parties involved via the purchase agreement and escrow instructions. Escrow and title companies have considerable oversight and state and federal laws to follow and often will run into an obstacle that could delay the transaction. For example, I am currently working on a transaction that has an obstacle on the title.
My client, the seller, sold a property years ago to a group of investors. As part of the deal, he gave the investors a first-right-of-refusal to purchase his adjacent land if he ever decided to sell. Today, we are close to closing escrow on the land with a different buyer and now have several individuals, the group of investors, on the title called grantees who retained the first right to purchase the property.
Having a recorded first-right-of-refusal creates a title obstacle which needs to be cleared up so the title company can close escrow and provide title insurance. Without the required documentation showing the grantees do not intend to purchase the land, we cannot close escrow.Read More