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 ownership of that property. These terms and conditions are given to a neutral third party known as the escrow holder. The escrow holder in turn 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 interest of all parties to the transaction are protected.

How Does the Escrow Process Work?

The Escrow Officer takes instructions based on the terms of your Purchase Agreement and the lender's requirement. The Escrow Officer can hold inspection reports and bills for work performed as required by the . purchase agreement. Other elements of the escrow include hazard and title insurance, and the grant deed from the seller to you. An Escrow cannot be completed until these items have been satisfied and all parties have signed escrow documents.

What Does the Escrow Holder Do?

The escrow holder is a neutral third party that maintains the escrow and impartially oversees the escrow process, insuring that all conditions of the sale are properly met.

The escrow holder's duties include:

• Serve as the neutral agent and the liaison between all parties involved.

• Prepare the escrow instructions.

• Request a Preliminary Title Search to determine the status of title to the property.

• Request a Beneficiary's Statement if debt or obligations are to be taken over by the buyer or paid in full by the seller.

• Comply with the lender's requirements as specified in their instructions to escrow.

• Receive and handle purchase funds from the buyer.

• Prepare or secure the deed and other documents related to the escrow.

• Prorate taxes, interest, insurance and rents.

• Secure releases of all contingencies or other conditions imposed on the escrow.

• Record the deed and any other documents.

• Request the title insurance policy.

• Close the escrow pursuant to instructions supplied by the seller, buyer, and lender, if any.

• Disburse funds as authorized by the instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs.

• Prepare final statements for all parties involved that account for the disposition of all funds held in the escrow account.

How Do I Open An Escrow?

I, as your real estate agent, will open escrow. As soon as you execute the Purchase agreement, I will place your initial (earnest money) deposit into an escrow account at the title company.

Written evidence of the deposit is generally included in your copy of the sales contract. The funds will then be deposited in a separate escrow account and processed through your local bank. You will receive a receipt for the funds from the title company.

What Information Will I Have to Provide?

You may be asked to complete a Statement of Identity as part of the paperwork. Because many people have the same name, the Statement of Identity is used to identify the specific person involved in the transaction. Some of the information you may be asked to provide would include date of birth, social security number, etc. This information is strictly confidential.

How Long is an Escrow?

The length of an escrow is determined by the terms of the Purchase Agreement and can range from a few days to several months. The average length of an escrow is usually 30 to 45 days.

When Do I sign Escrow Instructions and Where?

A few days before closing, Your Escrow Officer or I will contact you to make the appointment for you to sign your escrow instructions, grant deed and final papers. At this time, your Escrow Officer will also tell you the amount of money you will need to bring close the escrow.

Your Appointment

This is a list of items you will need in preparation for your appointment to sign escrow papers:

1) Identification - All Parties - There are several acceptable forms of identification which may be presented. One of the following forms must be presented at the signing of escrow in order for the signature to be notarized: a current driver's license, passport, State of California Department of Motor Vehicles ID card.

2) Cashier's Check - Buyers - You need a cashier's check or a certified check issued by a California financial institution made payable to the title company in the amount given to you by your Escrow Officer. A personal check will delay the closing since the title company is required by law to have "good funds" before disbursing funds from the escrow.

3) Lender's Requirements - Buyers - Check with your lender to make sure you have satisfied all your lender's requirements before coming to the title company to sign papers.

4) Fire and Hazard Insurance - Buyers - You must have fire and hazard insurance in place before the lender will release any funds to the title company, to fund the loan. Whenever you buy a single family home you must have insurance. Once you have spoken to your insurance agent, call the escrow officer with the insurance agent's name and phone number so they can be sure the policy complies with your lender's requirements.

5) Title to Your Home - Buyers - You may refer to materials I will supply you or contact your attorney or tax consultant for more specific advice. This is a very serious matter and a decision not to be taken lightly. As a client of mine you will have the opportunity to have a free consultation with an estate Planning attorney to resolve this important issue.

After Your Appointment

After all parties have signed the necessary papers, your Escrow Officer will return the buyer's loan documents to the lender for a final review. This review usually occurs within a few days of execution of the documents. Once the review is completed, the lender will call your Escrow Officer so that the necessary final paperwork can be completed to record the documents and close the escrow.

Escrow Closing

The escrow closing is the legal transfer of title to the property from the seller to the buyer. Usually the Grant Deed and the Deed of Trust are recorded within one working day of the title company's receipt of loan funds.

Final Proceeds Check - Sellers

The proceeds check is disbursed upon the close of escrow when the Escrow Officer is able to verify with the County Recorder that the documents have recorded and legal transfer has occurred. The proceeds check can be delivered to me to deliver to you, It can be mailed to you, it can be electronically wire transferred or you may make arrangements to pick it up at the title company.