January 29th, 2010

Escrow-Who Does What in the process? Whether you are a Buyer or a Seller, the purchase or sale of a home in California goes through Escrow. Escrow is the process of transferring property from one party to another. In this process, each party will have items in which they are responsible for.

Escrow Company Responsibility:

• Receive executed contract from Listing agent to open Escrow. This is the instructions to Escrow on the terms and conditions of the sale
• Receives Earnest Money Deposit from Buyers agent and places in a Trust Account
• Opens Title Insurance Order
• Request Home Owners Association (HOA) documents if applicable
• Prepares documents; escrow instructions, transfer deeds, special instructions
• Receives approvals from Buyer on preliminary title report, HOA documents, pest inspections and any other reports
• Calculates prorations for taxes, HOA, rents
• Prepares Estimated Settlement Statement for Buyer and Seller
• Receives loan documents from Lender and arranges for signatures
• Requests evidence of Hazard Insurance for the Buyer
• Arranges for recording of deeds
• Collect additional closing funds from Buyer, arranges for Lenders funding of Buyers loan
• Disburses funds for Sellers loan pay off, pays all third parties such as title company, HOA, termite company, recording of documents and real estate commissions
• Close the Escrow! Prepare final Settlement Statement/HUD I for Buyer, Seller and Lender

Seller Responsibility:

• Executes Grant Deed to Buyer and gives to Escrow for recording
• In conjunction with Listing Agent, complete all required inspections such as termite and septic and provide Escrow with reports and completion
• Provide pay off Lender information
• Execute required instructions and documents

Buyer Responsibility:

• Execute required instructions and documents
• Provide new Lender information
• Provide Hazard Insurance information
• Deposits all funds required for down payment and closing costs
• Approve all reports and inspections
• Sign loan documents
• Provide Insurance carrier information
• Comply with all conditions of loan and confirm closing date

Lender Responsibility:

• Prepare closing documents for Buyers signature and deliver to Escrow
• Instructions to Escrow on how loan funds are to be disbursed
• Wire funds for settlement

No matter what your role is in the process, make sure your responsibilities are completed in a timely manner. This will ensure the Escrow process can remain on track for your closing date. If you have questions about what you need to do, make sure you talk to your agent or Escrow Officer! Everyone is working toward the same goal; Closing the deal!