The escrow process usually takes 30 to 45 days, and involves a lot of work and specific tasks from all parties involved. Escrow is the neutral third party that holds all deeds, documents, funds, and makes sure all parties have met all requirements before title is transferred. There is a significant amount of paperwork that is required to be completed during the escrow process. The time frames that items need to be completed, are outlined in the purchase contract. The majority of these items will be completed within 17 days from the acceptance of your offer. We will guide you through this process and through the completion of all forms and paperwork. The following is a general list of the items that you will need to complete, in the customary order that it will occur:
1. Apply For a Loan
The first thing to do is to formally apply for the loan. As you will already have been pre-qualified, this process should be relatively quick and simple. If you have been pre-approved for a loan, this step has already been completed.
2. Property Inspection
It is highly recommended that you hire a property inspector to determine the condition of the property. If you don’t know a property inspector we can recommend one. Although some conditions may be visible upon seeing the home, many are not. Of particular concern are any major system problems or failures, as well as code and safety violations. A written report is received a few days after the inspection. You can then ask the seller in writing to complete any repairs you think are important. However, the seller does not have to agree to complete these repairs. We will negotiate with the seller to get as many repairs completed as possible. If a meeting of the minds can not be reached between you and the seller you may cancel. Your deposit will then be refunded and the escrow canceled.
3. Property Disclosures
We will receive from the seller various disclosures forms that are required to be completed prior to the close of escrow. Quite often we receive them at the inspection and we will go over them with you at that time.
4. Escrow Instruction
Approximately a week after opening escrow you will receive a large package of forms and information from escrow. All items need to be completed and returned in a timely manner.
5. Preliminary Title Report, Termite Report and Natural Hazard Disclosures
These reports will be received from the escrow company. The title report lets us know if title is clear to pass, and what liens and easements have been recorded on the property. The termite report will tell us the physical condition of the property in terms of termites and dry rot. The natural hazard disclosures are government mandated disclosures. Generally, you have five days to approve all reports as you receive them. We read every report that is sent out on the property.
6. Obtain a home owners insurance policy
Rates tend to vary significantly from carrier to carrier. We have found it is best to start early and shop around with all the major carriers.
7. Walk Through
Approximately five days prior to the close of escrow a walk through is scheduled for the property. This is to assure that the property has been maintained in the same condition, and that any repairs that were agreed to, were done in a workman like manner.
8. Signing Loan Documents
This takes place in escrow approximately 3 or 4 working days prior to the close. This process generally takes a few hours, and is completed at the office of the escrow company. If you prefer to sign after hours, a traveling notary can come to your home at an additional cost.
9. Final Funds
The final funds to close escrow will be due approximately 2 days prior to the close of escrow. These funds need to be in the form of a cashier’s check, or wired directly into the escrow account. The escrow officer will provide the exact figure after they receive your loan documents.
10. Closing
The loan will fund, and escrow will close the following day. If the house is vacant you generally will receive possession on the day of recording. If the home is occupied, the previous owner usually has 1 to 2 days to move before you receive possession of your new home. This time period is determined in the purchase contract.
Miscellaneous Items
There are several miscellaneous items that need to be taken care of during the escrow process by the buyer. They are as follows:
1. Movers:
If you are going to use a moving company, getting a few competitive bids is important. We have found that prices can vary greatly from company to company.
2. Mail Service:
Put a change of address in to the post office approximately 10 days prior to the close of escrow.
3. Change over utility service:
You will want to schedule the stop of the utilities on your current residence, and schedule service to be turned on in your new home approximately 5 days prior to the close of escrow.
4. Additional address changes:
Let your auto, health insurance, and credit card companies, banks, etc. know of your new address. You can change your auto registration and drivers license through the DMV web site.
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