The Escrow Process: A Step-by-Step Guide
Escrow is an important part of the home-buying process. It’s a neutral third-party that holds onto important documents and funds until all the conditions of the sale are met. Here’s what you can expect during the escrow process:
- Escrow is Opened: The escrow process begins when the agents involved in the sale open an escrow account and deposit the earnest money.
- Reviewing the Title Report: Escrow orders a title report to make sure the buyer is getting clear title to the property.
- Signing Escrow Instructions: Escrow prepares instructions for all parties involved in the sale to sign, either in the escrow office or remotely.
- Obtaining Financing Information: Escrow establishes communication with the buyer’s lender to obtain information about the financing.
- Reviewing Payoff Statements and Contingencies: Escrow orders payoff statements for existing loans and works to satisfy any other contingencies, such as pest inspections or home protection plans.
- Loan Approval and Signatures: After the loan is approved, the buyer is asked to sign the loan documents and arrangements are made for the transfer of final funds. The seller is also asked to sign final documents.
- Reviewing the Settlement Statement: Escrow provides the seller with a settlement statement to review and sign.
- Fund Disbursement: Once all funds required to close have been received, the escrow file is balanced, the deed is recorded, and the file is closed. All funds are then disbursed according to the original instructions.
- Transfer of Possession: The buyer obtains possession of the property and the keys are transferred.
The key to a successful escrow transaction is communication. Keeping everyone involved informed and up-to-date on what’s happening during the process can help ensure a smooth and successful outcome. If you have any questions or concerns, don’t hesitate to reach out to your escrow company or real estate agent.
