Do escrow/closing agents bear legal responsibility for making sure there are no unsatisfied liens or mortgages before allowing a purchase to close?

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Do escrow/closing agents bear legal responsibility for making sure there are no unsatisfied liens or mortgages before allowing a purchase to close?

I’m worried about the “Later Defects” paragraph under “Conditions” in my title-insurance commitment paperwork. If the seller were unethical enough to record a new mortgage against the property the day before closing, is there a chance it could be excluded from my title insurance, leaving my only recourse as suing the (broke) seller?

Asked on October 21, 2011 under Real Estate Law, Washington

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Good question. Your title officer is responsible for making sure that there is clear title to the property that you are purchasing before close of escrow and that all liens of record on the property you are purchasing are satisfied in full by the seller from proceeds from the sale as a condition of close.

Before you close escrow, you need to carefully read your preliminary report showing all liens of record on the property you are purchasing so that you know exactly what you need to have removed as a condition of close. Given the concerns that you have, I recommend that you sit down with your real estate agent and title officer before closing escrow so that you understand what liens are presently of record on the parcel you want to purchase.


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