What is Escrow?

You’ve probably heard the term: documents are held “in escrow” or that the parties have “opened escrow.” The principals of the escrow (Seller, Buyer, Lender) will give to the escrow holder written instructions setting out the terms and conditions under which the further delivery is to be made.

Escrow is the depositing of funds and documents that establish the terms and conditions for the transfer of property ownership with an impartial third party for delivery upon completion of the terms of the escrow instruction.

The Escrow Officer holds responsibility for seeing that these terms are adhered to.

Who Chooses The Escrow Company?
The selection of escrow is typically done by agreement between the principals. In most areas of the country, the Seller typically makes the selection but it does vary. Often times, this aspect of a transaction is directed toward the Seller’s preference because if a home has fallen out of escrow prior, disclosures and reports are already ordered and paid for with an escrow company so it makes sense based on cost and efficiency to stay with the same company.
Real estate agents or Lenders often recommend an escrow holder but it is the right of the Seller and Buyer to select the company they deem to be most competent and experienced.

The Purpose of an Escrow
The common use of an escrow is to enable the parties in a real estate transaction to deal with each other with less risk, since the escrow holder acts as:
• Custodian for funds and documents
• A clearing house for payment of all demands
• An agency to perform the clerical details for the settlement of the accounts between the parties

Typical Escrow Transaction
An escrow begins with the Realtor opening the order for title work and providing the Purchase Agreement and all executed documentation to escrow. Once received, the escrow company prepares a preliminary report. Upon receipt on the preliminary report, an analysis is made to determine the necessary action and documents required to complete the transaction:
• Demands for satisfaction of liens not acceptable to Buyer and/or Lender
• Documents for recording
• Instructions and requirements of the new Lender

In most areas, Buyer and Seller instructions are prepared for signature from the information gathered. When all the title and financial requirements are met, and instructions from all parties can be fully complied with, the escrow is said to be ‘in perfection’ and can close.
Once the financial settlement takes place, documents are recorded and the title insurance policies are then issued.

(Information provided by Title365)

Your home may be worth more than you think! If you’re interested in selling your home in the Inland Empire, I’m offering a FREE Market Evaluation where I would be able to tell you what your home is worth and suggest a listing price.
Visit MyCityHouseValues.info to get started!

Thank you and have a great day!

Noe Rodriguez
Montelongo Realty
(909) 821-4718 / noe9595@gmail.com
Website: HS-90.com
Facebook.com/HouseSoldin90Days

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Who’s Who in a Real Estate Transaction

There’s many people and roles involved in a real estate transaction and for someone who is new to the process, it can be unclear who does what.
Here are some of the roles and descriptions of what their purpose is in a transaction.

BUYER

• Submits a written offer to purchase or accepts the Seller’s counter-offer accompanied by a good faith deposit amount.
• Applies for a new loan by submitting all required forms and often pays certain fees such as credit report and application costs.
• Approves the preliminary report and any property, disclosure or inspection reports called for by the purchase and sale agreement (Deposit Receipt).
• Approves and signs the escrow instructions, new loan documents and other related instruments required to complete the transaction.
• Fulfills any conditions contained in the contract, lender instructions and/or the escrow instructions.
• Approves any final changes by signing amendments in the escrow instructions or contract.
• Deposits sufficient funds in the escrow to pay the remaining down payment and closing costs.

LENDER (When Applicable)

• Accepts the loan application and related documents from the Buyer(s) and begins the qualification process.
• Orders and reviews the property appraisal, credit report, 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 the Buyer’s approval and signature.
• Reviews and approves the executed loan package and coordinates the loan funding with the escrow officer.

ESCROW OFFICER

• Receives order for the title and escrow services for Title365.
• Accepts Buyer’s earnest money deposit. Orders the title search and examination on the subject property from Title365’s title officer.
• Acts as the impartial “stakeholder” or depository, in a fiduciary capacity for all documents and monies required to complete the transaction per written instructions of the principals.
• With the authorization from the real estate agent or principal, orders demands on existing deeds of trust and liens or judgments, if any. For assumption of loan by Buyers, orders the beneficiary’s statement or formal assumption package.
• Reviews documents received in the escrow: preliminary report, payoff or assumption statements, new loan package and other related instruments.
• Reviews the conditions in the Lender’s instructions, including the hazard and title insurance requirements.
• Prepares the escrow instructions and required documents, together with a preliminary estimate of settlement charges, for the Buyer & Seller, in accordance with the terms of the purchase and sale agreement.
• Presents the instructions, documents, statements, loan package(s), estimated closing statements and other related documents to the principal(s) for approval and signature.
• Reviews the signed instructions and documents, returns the loan package and requests the lender’s funds.
• Determines when the transaction will be in the position to close and advises the parties.
• Assisted by title personnel, records the deed, deed of trust and other documents required to complete the transaction with the County Recorder and order the title insurance policies.
• Closes the escrow by preparing the 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.

SELLER

• Submits documents and information to escrow holder, such as: addresses of lien holders, tax receipts, equipment warranties, home warranty contracts, any leases and/or rental agreements.
• Orders inspections, 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).
• Approves and signs the escrow instructions, payoff demands, grant deed and other related documents required to complete the transactions.
• Approves any final changes by signing amendments to the escrow instructions or contract.
• Reviews documents received in the escrow: preliminary report, payoff or assumption statements, new loan package and other related instruments.
• Reviews the conditions in the lender’s instructions including the hazard and title insurance requirements.

TITLE OFFICER

• Examines the title to the real property and issues a preliminary report.
• Determines the requirements and documents needed to complete the transaction and advises the escrow officer and/or agents.
• Reviews and approves the signed documents, releases the order for title insurance prior to the closing date.
• When authorized by the escrow officer, the title officer records the signed documents with the County Recorder’s office and issues the title insurance policies.

(Information provided by Title365)

If you’re interested in selling your home in the Inland Empire, I’m offering a FREE Market Evaluation where I would be able to tell you what your home is worth and suggest a listing price.
Visit MyCityHouseValues.info to get started!

Thank you and have a great day!

Noe Rodriguez
Montelongo Realty
(909) 483-2696 / noe9595@gmail.com
Website: HS-90.com
Facebook.com/HouseSoldin90Days

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