Step 7 Opening up Escrow
Congratulations! Offer accepted! It is time to open up escrow but first, what is escrow? There are fees involved in this step so it always surprises me that I rarely get asked what it is and why we need it. When you buy/sell a home, you go through the escrow process. So, let’s talk escrow!
Your escrow process is an ongoing process throughout the transaction in which the Buyer(s), Seller(s), real estate agents, lender, title officer, and escrow officer all participate. Working together, we will reach the main objective…closing your escrow as smoothly as possible and on time.
Escrow services are provided by a title insurance company. An escrow is a process where the buyer and seller deposit funds, provide documents, and written instructions via the purchase contract, to a neutral third party until certain conditions are fulfilled.
During the escrow period, the escrow officer orders the title commitment and an examination begins on all of the historical records pertaining to the property being sold. Barring any unusual red flags, the title company issues a commitment for title insurance indicating a clear title or listing any items which must be cleared prior to closing.
The escrow officer coordinates instructions and deadlines on your contract and ensures all necessary paperwork is gathered. For example, written requests for demands (payoff information) are sent to the Sellers mortgage company and any other lien holders. Requests for written disclosures for the HOA are ordered so that the buyer receives the cc&r’s for the community they are purchasing in, as well as, a disclosure of monies needed or violation that need to be rectified.
And last but not least, the escrow officer handles transferring the property from seller to buyer on closing day!
Join me next week as I share step 8 where we talk about applying for your mortgage! Did you miss step 6? Catch it here!