It all begins with the offer and acceptance skillfully negotiated by the real estate agents representing Buyer and Seller.
Tenders a written offer to purchase (or accepts the Seller's counter-offer) accompanied by a good faith deposit amount.
Approves and signs the escrow instructions and other related instruments required to complete the transaction.
Approves the preliminary report and any property, disclosure or inspection report called by the purchase and sale agreement. (Deposit Receipt)
Approves and signs new loan documents and fulfills any remaining conditions contained in the contract, lender's instructions and/or the escrow instructions.
Deposits funds necessary to close the escrow. Approves any changes by signing amendments in the escrow instructions.
The Lender (when applicable)
Accepts the new loan application and other related documents from the Buyer(s) and begins the qualification process.
Orders and reviews the property appraisal, credit report, verification of employment, verification of deposit(s), preliminary report and other related information.
Submits the entire package to the loan committee and/or underwriters for approval. When approved, loan conditions and title insurance requirements are established.
Informs Buyer(s) of loan approval terms, commitment expiration date and provides a good faith estimate of the closing costs.
Deposits the new loan documents and instructions with the escrow holder for Buyer's approval and signature. Reviews and approves the executed loan package and coordinates the loan funding with the escrow officer.
THE ESCROW OFFICER DOES . . .
serve as the communication link to all parties in the transaction.
prepare escrow instructions.
request a preliminary title search to determine the basis upon which a title insurance policy may
request a beneficiary's statement or pay-off demand relating to existing financing.
comply with lender's requirements, specified in escrow agreement.
receive purchase funds from the buyer.
prepare or secure the deed or other documents related to escrow.
prorate taxes, interest, insurance and rents according to instructions.
secure releases of all contingencies or other conditions as imposed on any particular escrow.
record deeds and any other documents
request issuance of the title insurance policy.
close escrow when all of the instructions of buyer and seller have been carried out.
disburse funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs.
prepare final statements for the parties accounting for the disposition of all funds deposited
The escrow officer does not . . .
offer legal advice.
negotiate the transaction.
offer investment advice.
FREQUENTLY ASKED QUESTIONS
What is an Escrow?
What is "close of escrow"?
When and how much money is required from the Buyer?
What is a Statement of Information?
What is the California Withholding Law?
What is a Certificate for 1099 Reporting?
What is an Affidavit of Non-Foreign Status?
When and how does the Seller receive their money from the sale?
When does the Buyer take possession of the property?
What could delay the close of escrow?
WHAT IS AN ESCROW?
Escrow is a service that enables the Buyer and Seller to transact business with each other through a neutral party, minimizing their risk.
WHAT IS "CLOSE OF ESCROW'?
This term refers to the recording of the Grant Deed and other applicable documents with the County Recorder.
WHEN AND HOW MUCH MONEY IS REQUIRED FROM THE BUYER ?
Upon approval of the new loan the lender sends loan documents to escrow. At this time the Escrow Officer gives the Buyer a final estimate of the funds needed for closing and schedules an appointment for the buyer to sign loan documents. Final funds for closing must be deposited into escrow not later than 48 hours prior to close.
WHAT IS A STATEMENT OF INFORMATION?
A confidential statement of information is required by the title company in order to insure the transfer of title.
WHAT IS THE CALIFORNIA WITHHOLDING LAW?
The California Taxation and Revenue Code requires Buyers to withhold from Sellers proceeds an amount equal to 3 1/3rd percent of the sales price on the sale of certain California real properties. Sellers are required to complete Form 593-C and return it to escrow prior to close to insure compliance with California's tax withholding requirements.
WHAT IS A CERTIFICATE FOR 1099 REPORTING?
The Internal Revenue Service requires each Seller to answer questions about the nature of their transaction. If one of the four questions the Seller is required to answer does not apply to the Sellers transaction, a 1099 is required to be issued on the sale.
WHAT IS AN AFFIDAVIT OF NON-FOREIGN STATUS?
The Internal Revenue Service requires the Buyer to withhold tax from the Sellers proceeds if the Seller is a foreign person. This affidavit is used to inform Buyers that a Seller is not a non-resident alien and withholding is not required.
WHEN AND HOW DOES THE SELLER RECEIVE THEIR MONEY FROM THE SALE?
Your proceeds will be available within one business day from close of escrow, either in the form of our escrow trust account check or a wire transfer.
WHEN DOES THE BUYER TAKE POSSESSION OF THE PROPERTY?
That depends on the terms of the purchase agreement. Please contact your real estate agent prior to close of escrow to arrange for the transfer of keys to the Buyer.
WHAT COULD DELAY THE CLOSE OF ESCROW?
Although we do everything possible to close on the day agreed upon by the Buyer and Seller, delays can be caused if:
•Information or conditions have not been provided to the lender in a timely manner
•Termite repair or other work requirements have not been completed on time
•Liens or judgments have not been cleared