All About Escrow
What is an Escrow
An escrow is an arrangement on which a neutral third party, called an escrow holder,
holds legal documentation and funds on behalf of a buyer and seller. The escrow agent
works closely with you, your realtor and lender to assure that the sale conditions are
complied within the time period called for in the Residential Purchase Agreement and
Joint Escrow Instructions. After all parties have executed these documents, escrow
prepares an Addendum to the Residential Purchase Agreement and Joint Escrow Instructions.
Escrow then distributes them according to the buyers and sellers instructions. Both the
buyer and the seller rely on the escrow holder to carry out faithfully their mutually
consistent instructions relating to the transaction. Escrow holder is bound by law to
notify both parties if the instructions given are not mutually consistent or cannot be
carried out. These instructions are drawn by the Escrow Officer, and signed by the buyer
and seller. Since the escrow instructions are not as detailed as the Purchase Contract,
the information contained in the instructions is intended to direct the Escrow Officer
in the specific steps that are to be completed through the escrow instruction.
Life of an Escrow
The escrow company is a neutral third party in the escrow transition. They work closely
with your realtor and your lender to fit together all the jigsaw pieces of the transaction,
assuring that the escrow instructions are adhered to within the specified time frame.
Your Escrow Officer carries out the following procedures and responsibilities:
- PREPARE AN ADDENDUM TO THE CONTRACT: As directed and reviewed by the Real Estate Agents.
- ORDER PRELIMINARY TITLE REPORT: The preliminary title report is ordered from the
title insurance company for the property you are buying or selling. This report reveals
liens of public record and is the guideline escrow uses to assure that title is conveyed
with only the liens and matters the buyer has agreed to accept.
- ORDER PAYOFF STATEMENTS (DEMANDS): Order demands from the lender of record the current
mortgage(s) on the property, the homeowners association statement and documents, and
any other lien information, which affects the title to the property.
- PREPARE ESTIMATED CLOSING STATEMENT: As soon as loan documents are delivered to us,
we will estimate the closing costs and call the buyer to arrange for an appointment to
sign the loan documents and bring the closing funds.
- ORDER INSURANCE: Upon receipt of the loan documents and signing of the lenders
insructions, escrow will order the insurance policy from the buyers insurance agent,
per the requirements of buyers new lender.
- SET UP FUNDING: When the buyer has signed all loan documents, they are then sent to
the lender with a request that the loan funds be released (funding). Your escrow has
not yet closed at this point; recording of the grant deed is the trigger. Lenders have
different time schedules. Some fund their loans locally and need only one days notice,
while others will need up to two full days to review the loan package and fund.
- When the lender verifies that they are in a position to release the loan funds, the
Escrow Officer calls the title company to set-up the recording. Insured documents in
San Diego County record at 8:00am. The title company rechecks public county records
prior to having the documents recorded, to assure that no liens have been recorded.
Occasionally, a new lien will appear and the recording is pulled until a clearance of
the new lien is obtained.
- Between 10:30 am and 12:00 pm, the title company will call to confirm that all
documents have been recorded and give escrow the final title and payoff of existing
lender costs. Escrow will then balance your file, type closing statements and disburse
funds.
NOW YOUR ESCROW IS CLOSED!
What do I have to do while in escrow?
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The key to any transaction as important as your sale, purchase or loan is to read and
understand your escrow instructions. If you do not understand them, you should ask your
escrow officer to explain the instructions.
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Your escrow officer is not an attorney and cannot practice law; you should consult your
lawyer for legal advice. Do not expect your escrow officer to advise you as to whether
or not you have a "good deal" or are doing things the right way. The escrow officer is
there to follow the instructions given by the principals in the escrow.
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In order to expedite the closing of the escrow, you should check with your escrow
officer as to what specific items you could do to assist. Ask the question "What can
I do to expedite the closing of this escrow?"
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Respond quickly to correspondence. This will assist in the timely closing of the
transaction.
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If you are required to deliver funds into the escrow, make sure that you provide "good"
funds in the form required by the escrow officer. Company procedures differ in this regard,
and there are many ways you can help at the time of closing; check with your escrow officer.
Do not give the escrow officer a personal check and expect the escrow to close immediately;
the escrow can only close on cleared funds, and the processing of a personal check can take
days, possibly even a week or more.
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When the escrow officer closes the escrow, some of you may want the closing papers,
checks, title policies, statements, etc. Made available immediately. There are many
aspects to the closing of the escrow, and some of these cannot be processed on the day
of the closing; they may take several days. If you have a special need, for example, a
cashiers check on the day of closing, you should communicate that need to the escrow
officer early in the processing of the escrow.
Escrow Services
Sea Coast Escrow is a professionally staffed, full service company. We utilize
state-of-the-art computerized equipment to help us process information and transmit
data with accuracy and speed. Acclaimed for its high standard of excellence, Sea Coast
clients appreciate its dedication and focus on escrow.
Our services include:
- Sale Escrows Homes, Apartments and Condominiums
- Refinances 1st, 2nd, 3rd
- Trust Deeds
- Trust and Condo Conversions
- Relocations
Call or visit any of our dynamic Sales Teams. Well be happy to discuss what we
can do for you and answer any questions you may have.
Seller Responsibilities
The SELLER can generally be expect to pay for:
- Real Estate Commission
- Document preparation fee for Deed
- Documentary transfer tax ($1.10 per $1,000.00 of sales price)
- Payoff of all loans in sellers name (or existing loan balance if being assumed by buyer)
- Interest accrued to lender being paid off, Statement Fees, Reconveyance Fees and any prepayment penalties.
- Termite inspection (according to contract)
- Termite Work (according to contract)
- Any judgments, tax liens, etc., against the seller.
- Tax proration (for any taxes unpaid at time of transfer of title)
- Any unpaid Homeowners dues
- Recording charges to clear all documents of record against seller
- Any bonds or assessments (according to contract)
- Any and all delinquent taxes
- Notary Fees
- Escrow Fee (one half)
- Title Insurance Premium for Owners Policy
Buyer Responsibilities
The BUYER can generally be expected to pay for:
- Title insurance Premium for Lenders Policy
- Escrow Fee (one half)
- Document preparation (if applicable)
- Notary Fees
- Recording charges for all documents in buyers names
- Termite inspection (according to contract)
- Tax proration (from date of acquisition)
- Homeowners transfer fee
- All new loan charges (except those required by Lender for seller to pay) interest on new loan from date of funding to 30 days prior to first payment date Assumption/Change of Records fees for takeover of existing loan.
- Beneficiary Statement Fee for assumption of existing loan
- Inspection Fees (roofing, property inspection, geological, etc.)
- City Transfer/Conveyance Tax (according to contract)
- Fire Insurance Premium for first year
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