You have accepted an offer. Here is everything you need to know about the escrow process.
Within three days of an accepted offer, the buyer will wire a 3% deposit into our escrow account. This deposit is refundable until after the contingencies have been lifted. At that time, the buyer will not be able to cancel escrow without losing their deposit to you.
Escrow instructions: Within the next few days, escrow will be sending you a package with instructions. This will summarize the terms of the escrow and include reports and forms for you to read and fill out. Please look through them thoroughly and call us with any questions.
BUYER INSPECTIONS: Depending on what was negotiated in the contract, the buyer has anywhere from 0-17 days to complete a general home inspection and any other specific inspections, such as chimney, sewer line, and pool. These inspections may take between 2-4 hours depending on the size of the house, and may take at least one or two days. Usually the seller is not present, but one of us will be there. After a completion of the inspections, the buyer may ask for the seller to handle the repair of something that might have been uncovered. This is not out of the ordinary, and usually the buyer and seller come to an agreement regarding the issues.
TERMITE INSPECTION: In most cases, the seller is responsible for providing a termite inspection and paying for all section 1 (required) work. If a termite inspection has not already been done, we will need to schedule one now. If anything is uncovered during the inspection, we will need to make sure the work is completed before closing of escrow.
RETROFIT: It is the seller’s responsibility to make sure that the property complies will all minimum retrofitting standards from local and state laws. We will set up an inspection and arrange for any possible work to be done. Escrow will debit you for the cost. The report and certificate completion will be properly circulated.
ZONE DISCLOSURE REPORT: This is a required document that outlines natural hazard zones at the location of the property. This is required from the seller’s side, but escrow will order it, circulate it to all properties and debit you the cost at the closing of escrow. The cost is approximately $100.
PRELIMINARY TITLE REPORT: This is a report that is ordered and circulated by your escrow agent once escrow is opened. It will show anything recorded on title, including liens, that would need to be taken care of prior to the closing of escrow.
CITY REPORT: Some cities require this report before the closing of escrow. If you are in one of these cities, then escrow will contact you for your original signature so they may order the report. The fee for this report is generally $100-$200, and may need to be paid up front depending on the city.
The Buyer has the possibility of three main contingencies: Loan, Appraisal, and Investigation. These contingencies will be in the contract and cover the buyer for the following:
APPRAISAL: The property must appraise at the value of the offer.
LOAN: The buyer must be approved for the loan outlined in the contract.
INVESTIGATION: The buyer must be satisfied with the property after all reports are back from the investigating inspections.
The timeframes for each are set out in the contract. Once they have been removed, the buyer will no longer be able to back out of the contract without giving up their deposit.
5. Final Walk-Through
The buyer will do a final walk-through of the property two to five days before the scheduled closing date. This enables the buyer to verify that the property is more or less in the same condition it was in when escrow was opened. It also allows the buyer to see that any possible repairs required by the seller were completed. Sellers usually attended the walk-through to give the buyers additional information about the house, such as how to work the appliances and equipment and what vendors have been used at the property.
6. The Last Few Days
This is what will be happening just prior to and after closing:
SIGNING OF THE GRANT DEED: The Grant Deed transfers title to the buyer at closing. You will need to schedule an appointment with escrow to sign this Deed beforehand.
RECORDING: The funding of the buyer’s loan will happen the day before we officially close. On the actual date of closing, title will record the new deed with the city. This makes the sale official and escrow will then settle the account and wire the proceeds directly to you. It is now time to hand over the keys. We prefer to hand deliver the keys to the new owner and his/her agent and will need to make sure that we have all keys and garage openers, etc. upon recording.
- Resources for Buyers
- Resources for Sellers