It all begins with the offer and acceptance skillfully negotiated by the Realtors® representing Buyer and Seller
The Buyer
• Submits a written offer to purchase (or accepts the Seller’s counter-offer accompanied by a good faith deposit amount.
• Applies for a new loan by submitting all required forms & often pays certain fees such as credit report & application costs.
• Approves the preliminary report & any property, disclosure or inspection reports called for by the purchase & sale agreement, (Deposit Receipt).
• Approves & signs the escrow instructions, new loan documents & other related instruments required to complete the transaction.
• Fulfills any conditions contained in the contract, lender instructions and/or the escrow instructions.
• Approves any final changes by signing amendments in the escrow instructions or contract.
• Deposits sufficient funds in the escrow to pay the remaining down payment & closing costs.
Lender (when applicable) • Accepts the loan application & related documents from the Buyer(s) & begins the qualification process. • Orders & reviews the property appraisal, credit report, verification of employment, verification of deposit(s), preliminary report & other related information. • Submits the entire package to the loan committee and/or underwriters for approval. • When approved, loan conditions & title insurance requirements are established. • Informs Buyer(s) of loan approval terms, commitment expiration date, & provides a good faith estimate of the closing costs. • Deposits the new loan documents & instructions with the escrow holder for Buyer’s approval & signature. • Reviews & approves the executed loan package & coordinates the loan funding with the escrow officer.
The Escrow officer • Receives order for the title & escrow services for Title. • Accepts Buyer’s earnest money deposit. Orders the title search & examination on the subject property from Title’s title officer. • Acts as the impartial “stakeholder” or depository, in a fiduciary capacity for all documents & monies required to complete the transaction per written instructions of the principals. • With the authorization from the real estate agent or principal, orders demands on existing deeds of trust & liens or judgments, if any. For assumption of loan by Buyers, orders the beneficiary’s statement or formal assumption package. • Reviews documents received in the escrow: preliminary report, payoff or assumption statements, new loan package & other related instruments. • Reviews the conditions in the Lender’s instructions, including the hazard & title insurance requirements. • Prepares the escrow instructions & required documents, together with a preliminary estimate of settlement charges, for the Buyer & Seller, in accordance with the terms of the purchase & sale agreement. • Presents the instructions, documents, statements, loan package(s), estimated closing statements & other related documents to the principal(s) for approval & signature. • Reviews the signed instructions & documents, returns the loan package, & requests the lender’s funds. • Determines when the transaction will be in the position to close & advises the parties. • Assisted by title personnel, records the deed, deed of trust & other documents required to complete the transaction with the County Recorder & orders the title insurance policies. • Closes the escrow by preparing the final settlement statements, disbursing the proceeds to the Seller, paying off the existing encumbrances & other obligations. Delivers the appropriate statements, funds & remaining documents to the principals, agents and/or lenders.
The Seller • Submits documents & information to escrow holder, such as: addresses of lien holders, tax receipts, equipment warranties, home warranty contracts, any leases and/or rental agreements. • Orders inspections, receives clearances & approves final reports and/or repairs to the property as required by the terms of the purchase & sale agreement (Deposit Receipt). • Approves & signs the escrow instructions, payoff demands, grant deed & other related documents required to complete the transactions. • Approves any final changes by signing amendments to the escrow instructions or contract. • Reviews documents received in the escrow: preliminary report, payoff or assumption statements, new loan package & other related instruments. • Reviews the conditions in the lender’s instructions including the hazard & title insurance requirements.
The Title officer
• Examines the title to the real property & issues a preliminary report.
• Determines the requirements & documents needed to complete the transaction & advises the escrow officer and/or agents.
• Reviews & approves the signed documents, releases the order for title insurance prior to the closing date.
• When authorized by the escrow officer, the title officer records the signed documents with the County Recorder’s office & issues the title insurance policies.