the escrow process QUESTIONS ANSWERED
In a real estate transaction, escrow is an independent third party. When opening escrow, the buyer and seller determine the terms and conditions for the transfer of ownership of the property via the purchase contract. Escrow ensures that all mutually agreed upon terms and conditions are met before the transfer of ownership and distribution of funds. Escrow protects both you and the seller by managing the following tasks:
When do we need to open escrow? The seller will open an escrow. After your offer is accepted, you will need to wire your 3% deposit money into escrow. What does an escrow officer do? They oversee all aspects of your real estate transaction, such as signing paperwork, completing a title search, obtaining insurance, and collecting then distributing money. Why do properties fall out of escrow? Sometimes, there is a problem with the loan where the appraisal comes back lower than the offer price, or a structural problem is discovered during an inspection. How long does escrow take? The length of an escrow is determined by the purchase agreement. Depending on the terms, it can last from a few days to up to 90 days. A typical escrow in Southern California is 21-30 days.
Holding the buyer's good-faith deposit (typically 3% of the purchase price)
Disclosing escrow and title fees
Calculating prorated taxes, loan interest, and HOA fees
Providing a title reports
Ensuring that state and local transaction laws are followed Obtaining all necessary and notarized signatures Recording the transfer documents and ensuring their accuracy Receiving the down payment from the buyer
Receiving funds from the buyer's lender
Paying liens, any overdue tax, and HOA dues
Distributing proceeds to seller
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