What is Escrow?
Escrow is the process used to transfer property from one owner to another. Typically referred to as "closing the sale," escrow acts as a neutral third party to the transaction and carries out the instructions of the purchase and sale agreement. The Escrow Officer draws the legal documents necessary to close the sale, coordinates the closing activities and is responsible for the transfer of monies pertinent to the sale.

The Life Of An Escrow

• Purchase and Sale Agreement: The purchase transaction begins when the buyer and seller write the purchase and sale agreement.

• Mutual Acceptance: Once the buyer's offer is approved by the seller the completed agreement, signed by all parties, is sent to the agreed upon Escrow company.

• Escrow: Escrow Officers review title reports, pay off liens/judgments, review the documents for accuracy and follow through on all details noted in the purchase agreement.

• Signing of Documents: Separately, the buyer and seller meet with the Escrow Officer to sign closing and loan documents.

• Lender’s Final Approval: The signed loan documents are then sent to the lender for final approval.

• Recordation of Documents: The title company examines the documents and sends them to the county recorders office to be recorded for public records.

• Confirmation of Closing: Once Escrow receives final figures from the title company the transaction is complete. Funds are then disbursed to all parties involved. 

Who Takes Care Of What?

The Seller: The seller clears unsettled matters on the preliminary title report, makes all noted repairs to subject property and signs escrow instructions.

The Buyer: The buyer reviews the preliminary report and codes, covenants and restrictions (if provided), secures financing with lender, signs loan documents, provides hazard insurance for lender, signs escrow instructions, deposits funds and receives owner’s title insurance policy.

The Lender: The lender reviews the preliminary title report, qualifies the buyer, discloses closing costs, issues loan commitment and lender’s escrow instructions, arranges hazard insurance with buyer, prepares loan documents for escrow, receives and reviews executed loan documents, funds loan to title and receives lender’s title insurance policy.

The Escrow Officer: The Escrow Officer orders and reviews the preliminary report, provides copies of report to all parties; works with seller to clear liens, judgments, etc.; receives and prepares seller’s and buyer’s escrow instructions, receives buyer’s funds for escrow and deposits, complies with the lender’s escrow instructions, arranges new loan funding with lender, prepares document/special instructions, disburses monies/documents to appropriate parties, prepares final closing statement for buyer and seller.

The Title Process

What Is Title Insurance?
Protecting property owners against loss is accomplished by the issuance of a title insurance policy. If the status of the title to a parcel of real property is other than as represented by the seller and preliminary title report, and if the insured suffers a loss as a result of a title defect, the title insurer will reimburse the insured for that loss up to the face amount of the policy.

Title insurance differs significantly from other forms of insurance. While the functions of most other forms of insurance is risk assumption through the pooling of risks for losses arising out of unforeseen future events (such as death or accidents), the primary purpose of title insurance is to eliminate risks and prevent losses caused by defects in title arising out of events which have occurred in the *past*.

Title insurers perform an extensive search of public records to determine whether there are any adverse claims to the subject of real estate. Those claims are either eliminated prior to the issuance of a title policy or their existence is excepted from coverage. Title company insurance fees are of public record and available by calling New Century Title Company.

Prepare Yourself For The House Buying Process
Obtaining A Mortgage Loan Pre-Approval
Costs Associated With Home Buying
What To Expect When Viewing Homes
Escrow & Title Process

Inspections
Moving day!

Antonette Burroughs, Realtor^®  t  510-604-6255  t Antonette@AntonetteBurroughs.com