escrow process OVERVIEW OF THE Opening Escrow: Once the buyer and seller have a mutually accepted purchase agreement, the escrow process is initiated. The buyer's initial deposit, often referred to as earnest money, is submitted to an independent third party known as the escrow agent. Escrow Instructions: The escrow agent receives instructions from both the buyer and seller, outlining the conditions that must be met for the transaction to proceed. These instructions include contingencies, timelines, and specific details regarding the sale. Title Search and Preliminary Report: The escrow agent works with a title company to conduct a title search on the property. A preliminary title report is provided to the parties, outlining any existing liens, encumbrances, or other issues that may affect the property's title. Inspections and Contingencies: The buyer typically has a specified period to conduct inspections and address any contingencies outlined in the purchase agreement. This may include a home inspection, pest inspection, or other assessments. Loan Approval: If the buyer is obtaining financing, the lender works through the loan approval process during escrow. The lender may require additional documentation from the buyer and conduct an appraisal of the property. Addressing Contingencies: Based on inspection results, the buyer may request repairs or negotiate changes to the terms of the sale. The seller has the option to agree to these requests, deny them, or propose alternatives. The resolution of contingencies is a key aspect of the escrow period. Finalizing Financing: The buyer's lender finalizes the loan details, ensuring that all conditions for loan approval are met. The lender coordinates with the escrow agent to prepare the necessary loan documents. Signing Documents: Both the buyer and seller sign the required documents, including the closing documents and the deed. The escrow agent ensures that all parties have fulfilled their obligations before proceeding.
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