By Nancy Closson, President, Westland Escrow
Once an agreement between you and the seller has been finalized, escrow is ready to be opened. Escrow essentially allows for a disinterested third party (escrow holder) to keep all valuables and documents in trust until certain conditions are fulfilled.
Why You Need An Escrow
As the buyer, you want the assurance that no funds will change hands until all of the instructions in the transaction have been followed. This may include completion of all inspections and any repairs that were agreed upon.
How Escrow Works
The escrow holder is obligated to safeguard the funds and/or documents while they are in their possession, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
These provisions are written in the escrow instructions, which are drafted from the provisions agreed upon in the purchase agreements by the parties involved in the transaction.
The escrow officer will endeavor to expedite the timely closing by keeping all parties informed, handling documents and paying all bills as authorized, responding to authorized requests from the principals, closing escrow after the terms and conditions are met, distributing funds in accordance with the instructions and providing a written closing statement of all the charges and credits to your account.
Your Responsibilities During Escrow
Your most important role during this time is to read and understand your escrow instructions. Be sure to ask your escrow officer to explain anything you don’t understand, and make sure any legal questions are directed to your attorney.
In order to expedite the closing of escrow you should respond quickly to any correspondence and ensure any funds requested are delivered in the required form – cashiers checks or wired funds are preferable since escrow can only close on cleared funds and most other methods of funds transfer take more time to clear.
When escrow closes you will receive all your paperwork within a few days. As the new owner, you will receive your recorded deed directly from the County Recorder’s office.
Processing the Escrow
- Open escrow
- Review and forward preliminary title report to client and their lender
- Coordinate loan processing with loan officer
- Provide access and info (comparable sales) for appraiser
- As needed, order Pest Control, Roof,
- Property, Geological, etc, inspections
- Arrange access for inspectors
- Review all reports, forwarding them to the client (with interpretations, when needed).
- Order and schedule all repair work
- Review and forward all completion notices to client
- Order and review loan documents
- Review client’s escrow instructions with escrow officer
- Schedule and conduct buyer’s Walkthrough inspection
- Arrange client-escrow officer sign-off meeting
- Coordinate close of escrow and possession
- Arrange for transfer of the keys to the property
And handle any and all problems that arise along the way!