The
information in this brochure will help you
become more comfortable with the Escrow
Process you are about to begin. We hope to
answer your questions in advance and provide
you with step-by-step information that will
clarify your part in this process.
Please feel free to call us or your real
estate agent. We look forward to serving you.
What
exactly is an escrow?
An escrow is an independent
"stakeholder" account and is the
vehicle by which the interest of all parties
to the transaction are protected.
Your escrow is created shortly after you
execute your contract to purchase your home.
The escrow becomes the depository for all
monies, instructions and documents pertaining
to the purchase of your home. Some aspects of
the purchase are not part of the escrow. For
example, the buyer and the seller must decide
which fixtures or personal property items are
included in the purchase. Similarly, loan
negotiations are between the buyer and the
lender. Your real estate agent can guide you
in these non-escrow matters.
Escrow services in Northern California are
generally provided by title companies.
Opening Escrow
How does the escrow process work?
The escrow is a depository for all monies,
instructions and documents necessary for the
purchase of your home, including your funds
for the down payment and your lender's funds
and documents for the new loan. The escrow
officer takes instructions based on the terms
of your purchase agreement and your lender's
requirements. The escrow officer can hold
inspection reports and bills for work
performed as required by your purchase
agreement.
How do I open an escrow?
Your real estate agent will open the escrow
for you. As soon as you execute your purchase
agreement, your agent will place your initial
deposit into an escrow account at First
American Title or into the real estate
broker's trust account.
What do I do next?
I've selected my home, executed my purchase
agreement, made my purchase deposit and an
escrow has been opened.
Unless you are paying all cash, the next step
will be to apply for a mortgage loan. Your
real estate agent will be able to assist you
in selecting a lender.
The Loan Process
How does the loan process work?
Your real estate agent can provide you with
current financing information to help you in
selecting a lender. The lender might be a
bank, savings and loan or a mortgage company.
You will be required to complete a loan
application which will require personal and
financial information.
When the loan is approved, what's next?
When your loan is approved and the loan
documents are sent to the escrow officer or
the escrow assistant handling your
transaction, "escrow instructions"
will be prepared.
Escrow Instructions
What are escrow instructions?
Escrow instructions define all the conditions
that must occur before the transaction can be
finalized. Your escrow instructions represent
your written statement to the escrow holder
(the title company) protecting your interests.
Your escrow instructions specify, in a debit
and credit format, the disposition of your
purchase funds. They also provide for title
protection for your home.
You may sign your escrow instructions and loan
documents at a First American office, your
real estate agent's office or some other
location agreed upon by all parties.
Your Appointment
What do I need to do before my
appointment to sign the escrow papers?
Cashier's Check. Obtain a cashier's check or
certified check made payable to First American
Title in the amount indicated to you by your
escrow officer or escrow assistant.
Lender's Requirements. Make sure you are aware
of your lender's requirements and that you
have satisfied those requirements before you
come to the title company to sign your papers.
Hazard/Fire Insurance. If you are purchasing a
single family, detached home (or in some
cases, a town-home), be sure to order your
hazard/fire insurance once your loan has been
approved. You must have your insurance in
place before the lender will send money to the
title company.
Title to Home. Decide how you wish to hold
title to your new home prior to your escrow
appointment.We suggest you consult a lawyer,
tax consultant or other qualified professional
before you decide.
After the Sign-Off
What's the next step after I've
completed my sign-off?
After you have signed all the necessary
instructions and documents, the escrow officer
will return them to the lender for a final
review. This review usually occurs within a
few days and upon completion, the lender is
ready to fund your loan and advises the escrow
officer.
What is an
"Escrow Closing"?
It signifies legal transfer of title from the
seller to the buyer. The original deed to your
home will be mailed directly to you at your
new home by the County Recorder's office. This
usually takes several weeks.
Helpful Reminders
1. Are
you aware of your lender's requirements?
2. Have you ordered you hazard/fire insurance?
3. Bring a cashier's check.
4. Arrange for transfer of funds if necessary.
5. Arrange for Power of Attorney if necessary.
6. Bring either your valid driver's license or
passport.
7. Decide how you wish to hold title.
The
following is a brief list of the best sources
for assistance for certain common questions:
Details of your purchase agreement:
Your Real Estate Agent
Final amounts needed to close escrow (after
receipt of loan papers):
Your Title Company, Escrow Officer or Escrow
Assistant
Possession and key to home:
Your Real Estate Agent
Hazard/Fire insurance:
Your Insurance Agent
Loan requirements and financial matters:
Your Lender or Mortgage Company or Real Estate
Agent
Escrow Instructions (review at title
company on sign off day):
Your Title Company, Escrow Officer or Escrow
Assistant
How to take title or ownership:
Your Lawyer or Tax Consultant
Questions regarding property tax impounds:
Lender or Real Your Estate Agent
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