Seller Questions and Answers

What is an Escrow?

When opening an escrow, the Buyer and Seller of a piece of property establish terms and conditions for the transfer of the ownership of that property. These terms and conditions are given to a third party known as the Escrow Holder. The Escrow Holder has the responsibility of seeing that the terms of the escrow are carried out. The escrow is an independent neutral account and the vehicle by which the mutual instructions of all parties to the transaction are complied with.

How does the Escrow process work?

The escrow is a depository for all monies, instructions, and documents necessary for the purchase of your home. These include your funds for down payment, your lender’s funds, and documents for the new loan. Generally, the Buyer deposits a down payment with the Escrow Holder, and the Seller deposits the deed and any other necessary papers with the Escrow Holder. Prior to close of escrow, the Buyer deposits the funds required and agreed upon by the parties to the sale with the Escrow Holder. The Buyer instructs the Escrow Holder to deliver the monies to the seller when the Escrow Holder:

• Records the deed and,
• Delivers to the Buyer a policy of title insurance which shows title to the property vested in the name of the Buyer.

The Escrow Holder is authorized to deliver the deed to the Buyer when the Buyer has deposited the agreed-upon purchase price and fulfilled any other conditions specified in the escrow instructions. The Escrow Holder handles the prorations and adjustments on any fire / hazard insurance, real estate taxes, rents, interest, etc., based on the escrow instructions of both parties.

The Escrow Holder thus acts for both parties, and protects the interests of each within the authority of the escrow instructions. Escrow cannot be completed until the instructions have been satisfied and all parties have signed escrow documents. The Escrow Holder takes instructions based on the terms of the Purchase Agreement and Lender's requirements.

Who opens an Escrow upon an executed contract?

Generally, the Buyer's Real Estate Agent will open the escrow. As soon as you execute the Purchase Agreement, the Selling Agent will place the Buyer's initial deposit, if any, into the escrow account.

What information will I have to provide during Escrow?

You may be asked to complete a Statement of Identity as part of the necessary paperwork. Due to the fact that many people have the same names; the Statement of Identity is used to identify the specific person in the transaction through such information as date of birth, social security number, etc. This information is kept strictly confidential.

What needs to be done before I sign the Deed?

All parties signing the documents must bring proper identification. Please bring either your valid driver's license, state identification card, or current passport with you to the escrow company. This item is needed to verify your identity by a notary public. This is a routine, but necessary step for your protection.

When do I sign the Escrow instructions and where does this take place?

Generally, your escrow instructions are mailed to you at this time you can fill them out. However, if you're unclear on how to fill them out, you can set up an appointment with your escrow officer.

How long is the Escrow process?

The length of an escrow is determined by the terms of the Purchase Agreement. A typical escrow where Buyer needs to obtain financing to purchase the property can range anywhere from thirty (30) to sixty (60) days. However, if a Buyer is paying cash for the property and does not need to secure financing, the Escrow process can be as short as ten (10) days

What is the "Close of Escrow" (COE)?

An escrow closing is the culmination of the transaction. It signifies legal transfer of the title from the Seller to the Buyer.

Generally, both the Grant Deed and Deed of Trust are recorded within one working day of the Escrow Holder’s receipt of loan funds. This completes the transaction and signifies the “close of escrow.” Once all the conditions of the escrow have been satisfied, the Escrow Officer informs you of the date escrow will close and takes care of the technical and financial details.

Do I continue to pay my monthly mortgage payments during the Escrow process?

Yes, your mortgage payment(s) must be kept current throughout the course of the escrow transaction. If the payments are not kept current; the Lender(s) can/will assess and collect late charges(s)

When and where do I get my final proceeds check?

The proceeds check is disbursed upon close of escrow. This is when the Escrow Officer is able to verify with the County Records Office that the documents have recorded and legal transfer has occurred. The proceeds check can then be delivered to your Real Estate Agent, or picked up from your Escrow Officer.