What is Escrow?
It is a neutral account holding funds, deed, or other instrument by one party for delivery to a second party once completion
of certain specified conditions or events are met. Escrow is set up to protect all involved parties.In a real
estate transaction an escrow account is opened and all monies, instructions and documents needed for the sale transaction
are placed therein. This includes the buyer's down payment funds and the seller's deed and any documents that are needed
for sale and transfer of the real estate. Terms and conditions of the sale are given to a neutral third party
(known as the escrow holder). The third party ensures that all of the terms and conditions are met before funds
or property changes hands.
What is the escrow process?
The buyer, lender and seller agree on the escrow instructions, sign and deliver them to the escrow holder. The escrow
holder processes the escrow in accordance to the instructions. After each of the terms and conditions of escrow
are complete, and the buyer has deposited the neccessary funds, the escrow is "closed".
During the term of escrow, the holder will act as an independent manager and takes his instructions from the agreements,
contracts and the instructions from the lender. His duties, essentially is to protect the interests of each party involved
in the transaction. His duties authorize him to pay bills, manage the funds and/or documents as set in his instructions,
responding to the principals requests, closing escrow after the terms and conditions are met and distributing the funds
funds after closing.
The escrow holder will release these funds only after the deed is recorded and a policy of title insurance is
complete and delivered to the buyer.
How is escrow opened?
It is usual that the seller's real estate agent will open the escrow account.
Immediately after the purchase agreement is completed, the agent will place the
buyer's funds (if any), in the escrow account at either a title company account or
into the broker's account.
What is needed for signing the escrow papers?
Each party signing must have proper identification. This can be driver's license,
state issued identification card or valid passport. Your identity must be
properly notarized. This protects all parties concerned.
What happens after the closing of escrow?
After all the papers have been properly signed by all parties, the holder will
forward the buyer's loan documents to the mortgage lender for a final review.
After that review and the buyer has been determined to have met all of their terms and conditions,
the lender is ready to fund the loan and notifies the holder.
How long does escrow take?
This is entirely determined by the terms
and conditions of the purchase agreement and can take as little as a few days or can last weeks or even months.
What is the "closing"?
Escrow closing occurs when the legal transfer of title to the buyer is completed.
Normally a Grant Deed of Trust is recorded within one working day of the receipt of loan funds
by the holder. This signals the "close of escrow".
When everything is complete and in order the holder will inform you or your agent
of the date of closing and wraps up the final details. The final escrow closing papers are distributed
on that date and after the holder verifies with the county recorder that
the documents have recorded and the legal transfer is complete.
We understand that particularly for a first time buyer, the entire process can be
confusing. We urge you to read all the material on our site and we promise to provide professional service to you in each step of the process.
Call us with any questions.
Thanks,
Esta and John Ingle
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