AN escrow is an arrangement in which a disinterested third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer's and seller's instructions.
Buyers and sellers often open an escrow for their protection and convenience. The buyer can instruct the escrow holder to disburse the funds only upon the satisfaction of certain prerequisites and conditions. The seller can instruct the escrow holder to retain possession of the deed to the buyer until the seller's requirements are met. Both rely on the escrow holder to faithfully carry out their mutual agreement.
An escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan issues, deeds, and many other items, using the escrow holder as the central depositing point. If the instructions from all parties to an escrow are clearly drafted, fully detailed and mutually consistent, the escrow holder can take many actions on their behalf without further consultation. This saves time and facilitates the closing of the transaction.
The escrow process was developed to help facilitate the sale or purchase of your home. The escrow holder accomplishes this by:
Acting as the impartial "stake-holder," or depository of documents and funds
Processing and coordinating the flow of documents and funds
Keeping all parties informed of progress on the escrow
Responding to the lender's requirements
Securing a title insurance policy
Obtaining approvals of reports and documents from the parties as required
Prorating and adjusting insurance, taxes, rents, etc.
Recording the deed and loan documents
Maintaining security and accountability of credits and debits. They also provide consistent instructions relating to the transaction and advises either party if any of their instructions are not mutually consistent or cannot be carried out.
WHEN you list your home with us, you will enjoy our VIP service. We will market your home, keep track of all the importants dates for you, coordinate between escrow, title, appraiser, inspectors and the buyer, set up appointments, and negotiate on your behalf. Escrow period can range from 10 days to 45 days. It is depends on what the seller and buyer has agreed to when they enter into contract.
The following is a general guideline as to what to expect:
1. Sign the listing contract with us.
2. Set up a pricing stragegy and marketing plan.
3. We will list and market your home.
4. We will start showing your home to qualified potential buyers.
5. Accepting an offer - We will receive offers from all buyers on your behalf. We will sit down with you and go over the terms of each offer and assist you on either selecting an offer or negotiating for better terms.
6. Escrow Starts, the buyer's deposit will be held in escrow's trust account.
7. Complete seller's disclosures and conduct termite inspection.
8. Buyer's Inspection Period - Typically 10-14 days after opening escrow, the buyer will conduct their inspection, do an appraisal, and review the seller's disclosures. When the buyer is safisfied with their findings, they will remove their buyer's contingencies in writing. (this is an imporant step, as after the buyer has removed their contingencies, they will not be able to legally cancel the contract without risking their deposit).
9. Buyer signs loan documents and deposits their final funds into escrow.
10. Buyer conducts the final walkthrough.
11. Buyer's new loan gets funded.
12. Close of escrow - When all the money and documents are deposited into escrow, the title gets transferred and the proceeds go to the seller.
13. Seller moves out and delivers possession of the house to the buyer.
WHAT IS AN ESCROW ?