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Real Estate Information |
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Escrow From a California Homeowners Perspective
The Escrow Process Both Buyer and Seller deserve the assurance that no funds or property will change hands until all of the instructions in the Purchase Contract have been satisfied. The Realtor submits Buyers and Sellers signed documents and Buyer's deposit money to be held by an independent neutral third party (Escrow). After the conditions agreed upon by both Buyer and Seller (in the Purchase Contract) are satisfied, Escrow then distributes the documents and the funds. The escrow holder is an independent neutral third party; works for both the Buyer and the Seller, and is authorized to follow the specific written instructions provided by both parties. Escrow functions: Receives and deposits (into escrow's account) Buyer's initial deposit and prepares escrow package. Requests "demands" (pay-off statements) from existing lenders and/or lien holders. Obtains Seller's notarized signature on grant deed. Safeguards grant deed until all terms and conditions are met and Buyer's remaining certified funds are on deposit. Orders title search and receives and distributes preliminary title report. Calculates prorations pertaining to property taxes, rents, insurance, interest, and other expenses as required. Coordinates with Buyer's lender throughout the escrow process. Orders and processes Buyer's loan documents. Coordinates Buyer's signing of loan documents and their return to Buyer's lender. Receives Buyer's final down payment funds and coordinates funding with Buyer's lender. Orders recordation of grant deed conveying title to Buyer and distributes all funds: pays-off existing loans; pays other required costs, such as termite completion, home protection policy; etc. Releases net proceeds to Seller. Simultaneously, the Buyer and the Buyer's lender are engaged with the loan approval process. Lender duties: Orders a credit report and other credit documentation as required (mortgage ratings, landlord ratings). Reviews the Buyer's credit and when necessary obtains satisfactory explanations from the Buyer regarding any negative credit history. Verifies the Buyer's sources of income. Verifies that the Buyer has adequate liquid funds for down payment, closing costs, and reserves. Requests an appraisal of the property, and verifies that the property's value is equal to the contract sales price. Submits the loan to for final approval. Coordinates delivery of the Buyer's loan documents to the escrow officer.And in the meantime... While the escrow officer, lender, and Buyer are diligently working, the Seller and the Listing Agent also have responsibilities: Numerous disclosures required by law need to be made by the Seller and the Listing Agent and provided to the buyer. Provide escrow officer information on existing loans to check against title search findings. Make the home available for physical inspection and other trades people as required by the purchase contract, such as licensed Termite Company and lender's appraiser. Make any repairs agreed upon in purchase contract, or as required by local ordinance (water heater strapping, smoke detectors, etc.). In order for your escrow to proceed smoothly, your Realtor's job is to coordinate and oversee the above chain of events. Similar to dominos - each event must occur in a timely fashion. You need an experienced Realtor because delays in any of these events may result in the postponement of escrow's scheduled closing date. The Escrow Process Both Buyer and Seller deserve the assurance that no funds or property will change hands until all of the instructions in the Purchase Contract have been satisfied. The Realtor submits Buyers and Sellers signed documents and Buyer's deposit money to be held by an independent neutral third party (Escrow). After the conditions agreed upon by both Buyer and Seller (in the Purchase Contract) are satisfied, Escrow then distributes the documents and the funds. The escrow holder is an independent neutral third party; works for both the Buyer and the Seller, and is authorized to follow the specific written instructions provided by both parties. Escrow functions: Receives and deposits (into escrow's account) Buyer's initial deposit and prepares escrow package. Requests "demands" (pay-off statements) from existing lenders and/or lien holders. Obtains Seller's notarized signature on grant deed. Safeguards grant deed until all terms and conditions are met and Buyer's remaining certified funds are on deposit. Orders title search and receives and distributes preliminary title report. Calculates prorations pertaining to property taxes, rents, insurance, interest, and other expenses as required. Coordinates with Buyer's lender throughout the escrow process. Orders and processes Buyer's loan documents. Coordinates Buyer's signing of loan documents and their return to Buyer's lender. Receives Buyer's final down payment funds and coordinates funding with Buyer's lender. Orders recordation of grant deed conveying title to Buyer and distributes all funds: pays-off existing loans; pays other required costs, such as termite completion, home protection policy; etc. Releases net proceeds to Seller. Simultaneously, the Buyer and the Buyer's lender are engaged with the loan approval process. Lender duties: Orders a credit report and other credit documentation as required (mortgage ratings, landlord ratings). Reviews the Buyer's credit and when necessary obtains satisfactory explanations from the Buyer regarding any negative credit history. Verifies the Buyer's sources of income. Verifies that the Buyer has adequate liquid funds for down payment, closing costs, and reserves. Requests an appraisal of the property, and verifies that the property's value is equal to the contract sales price. Submits the loan to for final approval. Coordinates delivery of the Buyer's loan documents to the escrow officer.And in the meantime... While the escrow officer, lender, and Buyer are diligently working, the Seller and the Listing Agent also have responsibilities: Numerous disclosures required by law need to be made by the Seller and the Listing Agent and provided to the buyer. Provide escrow officer information on existing loans to check against title search findings. Make the home available for physical inspection and other trades people as required by the purchase contract, such as licensed Termite Company and lender's appraiser. Make any repairs agreed upon in purchase contract, or as required by local ordinance (water heater strapping, smoke detectors, etc.). In order for your escrow to proceed smoothly, your Realtor's job is to coordinate and oversee the above chain of events. Similar to dominos - each event must occur in a timely fashion. You need an experienced Realtor because delays in any of these events may result in the postponement of escrow's scheduled closing date. Phyllis Harb, a California native is a Realtor/Marketing Specialist at RE/Max Tri City in La Canada, California. RE/MAX Tri-City offers additional offices in La Crescenta, Glendale, Los Feliz and Pasadena. Harb has been assisting Los Angeles County home sellers and buyers since 1989 and additionally offers over 10 years experience in real estate lending. Harb has an award winning web site @ http://www.RealtorHarb.com & may also be contacted at 818 790-7325.
MORE RESOURCES: Florida Trend Real Estate Florida Trend Supreme Court declines REX-Zillow case, ending lengthy fight RealEstateNews.com 17 transformational real estate projects we're watching this fall The Business Journals 7 hidden mistakes agents are making (and what to do instead) Inman Real Estate News He Left the City for a Cat in Brooklyn The New York Times Cape Cod House Hunt: Eastham home on bluff for $239K Cape Cod Times District court rules for PLF’s client, allowing challenge to Nevada’s real estate rules to proceed Pacific Legal Foundation Key Takeaways from the Second Annual North Texas Real Estate Summit Foley & Lardner LLP Sacramento mayor proposes real estate transfer tax increase to fund housing, homelessness solutions ABC10 PRESS RELEASE: New law offering consumer protections in real estate wholesaling takes effect Nov. 1 Oklahoma City Free Press Real estate transfers Findlay News | The Courier Real Estate Transactions, Oct. 20 edition Hopkinton Independent Real estate target allocations fall for first time in over a decade Private Equity Real Estate | PERE Los Angeles Times’ Commercial Real Estate Magazine Recognizes Jane Hinton as a 2025 Visionary Hunton Andrews Kurth LLP London Real Estate Practice Quarterly Legal Update – Autumn 2025 The National Law Review Sioux City Council will discuss approving a development agreement with Tri-State Real Estate Siouxland Public Media Watch Ryan Serhant on Real Estate Outlook Bloomberg.com Homeownership hasn’t been affordable in over 4 years RealEstateNews.com Ares Management shifts roles within real estate business Alternatives Watch $1.26 billion of real estate sold in September Kentucky Today Zillow pulls Matterport tours from listings, blames CoStar RealEstateNews.com Lake Tahoe Real Estate: A Year of Transition, A New Chapter Begins The National Law Review News | CIP Real Estate taps three Wall Street banks for $820 million industrial refinancing - CoStar REAL ESTATE | American Construction Services introduces Regal Place in Kewaskum, WI | By Christa Weindorf Washington County Insider Why Commute Times Are Increasing in Corpus Christi Texas Real Estate Research Center Nate Paul's real estate empire dwindles thanks to sales, new foreclosures The Business Journals Real estate pros are anticipating a busy winter season in Palm Beach. Here's why. Palm Beach Daily News East Cobb residential real estate sales, Oct. 6-10, 2025 East Cobb News Government Shutdown Update: State of Play Three Weeks In National Association of REALTORS® The 2025 Home Renovation Trends That You'll Regret Within a Year—and What to Try Instead The Spruce MUSICK PEELER’S CHET CRAMIN NAMED A 'COMMERCIAL REAL ESTATE VISIONARY' BY LOS ANGELES TIMES The National Law Review Take a look at the off-season’s priciest real estate sales in Palm Beach Palm Beach Daily News Fidelity International closes $412 million real estate and climate fund with backing from Australia’s Rest super Pensions & Investments Sunrise Realty Trust, Inc. Commits $25.6 Million to TCG Real Estate's CollectionSuites Development in Florida Quiver Quantitative 3 Google Business Profile mistakes you can’t afford to make Inman Real Estate News Downtown office tower trades hands for more than $40M Crain's New York Business CoStar’s Matterport 3D Home Tours Removed from Zillow’s Platforms Weekly Real Estate News Meet Spencer Muratides, a 2025 40 Under 40 honoree The Business Journals John R. Wood Christie’s International Real Estate Leadership Role Updates Coastal Breeze News ‘Married to Real Estate’ Stars Egypt Sherrod and Mike Jackson Address Breakup Rumors PopCulture.com Old Town's largest home, prime development site in play amid owner's legal battles The Business Journals 5 quick questions: Prism AI – purpose-built AI for commercial real estate Commercial Observer Howard Hanna expands into Manhattan with new acquisition Long Island Business News Former longtime Illinois GOP leader asking near $7M for lakefront New Buffalo home Crain's Chicago Business Real Estate Quarterly: Building With The Right Plan Los Angeles Business Journal Are the wizards of Oz set to drive global real estate investment? Private Equity Real Estate | PERE A New Era of Fair, Transparent Real Estate Representation - Agent Arena Soft Launches in South Florida PR Newswire Safeway-anchored Elk Grove shopping center sold for $19.1 million The Business Journals Lennar among buyers of $68 million Broward development site (Photos) The Business Journals The National Observer: A booming industry has a big staffing challenge The Business Journals Why One of Las Vegas’s Top Real Estate Agents Recommends Selling Your Home in an Off-Market Deal Mansion Global Where Opus development chief sees opportunity amid building slowdown The Business Journals FisherBroyles Brings On Mexico Real Estate Veteran Daniel Gancz Bloomberg Law News GO RESIDENTIAL REAL ESTATE INVESTMENT TRUST ANNOUNCES RELEASE DATE FOR THIRD QUARTER 2025 RESULTS AND CONFERENCE CALL Yahoo Finance Houton Astros legend Craig Biggio lists his Texas ranch for $10.85M CultureMap Houston HAR: Area housing market maintains balance in September Fort Bend Star |
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