Life of an Escrow
- Tenders a written offer to purchase (or accepts the seller’s counter-offer) accompanied by a good-faith deposit amount.
- Applies for a new loan, completing all required forms and often repaying certain fees such as credit report and appraisal costs.
- Approves and signs the escrow instructions and other related instruments required to complete the transaction.
- Approves and signs the new loan documents and fulfills any remaining conditions contained in the contract lender’s instructions, and/or the escrow instructions.
- Accepts the buyer’s offer to purchase and initial good faith deposit to open escrow.
- Submits documents and information to the escrow holder, such as: loan numbers, the addresses of lien holders, tax receipts, equipment warrantees, home warrantee contracts, any leases and/or rental agreements.
- Approves and signs the escrow, instructions, grant deed, and other related documents required to complete the transaction. Orders point of sale inspections (when applicable), receives clearances, and approves final reports and/or repairs to the property as required by the terms of the purchase and sale agreement. (Deposit Receipt)
- Fulfills any remaining conditions specified in the contract and/or escrow instructions; approves the pay off demands and/or beneficiary’s statements.
- Approves any final changes by signing amendments to the escrow instructions or contract.
The Escrow Officer
- Receives an order for escrow and title services.
- Orders the title search and examination on the subject property from Land Title, and also a location survey when applicable.
- Acts as the impartial “stakeholder,” or depository, for all documents and moneys required to complete the transaction per written instructions of the principals.
- Prepares the escrow instructions and required documents in accordance with the terms of sale.
- With authorization from the real estate agent or principal, orders demands on existing mortgages and liens or judgments, if any. For assumption or subject to loan, orders the beneficiary’s statements or formal assumption package.
- Reviews the documents received in the escrow; preliminary report, payoff or assumption statements, new loan package and other related instruments. Reviews the lender’s instructions including the hazard and title insurance requirements.
- Presents the documents, statements, loan packages, estimated closing statements and other related documents to the principals for approval and signature, and requests the balance of the buyer’s funds.
- Reviews the signed instructions and documents, returns the loan package, and requests the lender’s funds.
- Receives the proceeds from the loan(s).
- Determines when the transaction will be in the position to close and advises the parties.
- Assisted by the title personnel, records the deed, mortgage, and other documents required to complete the transaction with the county recorder and orders the title insurance policies.
- Closes the escrow by preparing final settlement statements, disbursing the proceeds to the seller, paying off the existing encumbrances and other obligations. Delivers the appropriate statements, funds, and remaining documents to the principals, agents, and/or lenders.
- Accepts the new loan application and other related documents from the buyers and begins the qualification process
- Orders and reviews the property appraisal, credit report, verification of deposits, preliminary report, and other related information.
- Reviews and approves the executed loan package and coordinates the loan funding with the loan officer.
The Title Company
- Receives an order for title service.
- Examines the title to the real property and issues a title commitment.
- Determines the requirements and documents needed to complete the transaction and advises the escrow officer and/or agents.
NOTE: THE INFORMATION CONTAINED IN THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED TO TAKE THE PLACE OF A LEGAL OPINION. IF YOU HAVE ANY QUESTIONS ON THE INFORMATION CONTAINED IN THIS DOCUMENT, IT IS SUGGESTED THAT YOU CONTACT YOUR ATTORNEY FOR CLARIFICATION.