So, you’ve found the home of your dreams. You obtained a pre-approval letter from a mortgage lender. The seller has accepted your offer. You’re practically home-free, right? Not so fast. There’s still one step left in the home buying process: escrow.
Escrow is easy to define. But reaching the close of escrow and having the keys to the front door in your hand depend on many factors.
What is escrow and how does it work?
Over the years, the escrow process has evolved. It is no longer just a safe, independent third party or company that holds the money until the transaction is complete. Now, escrow officers have much more responsibility, one of which is drawing escrow instructions reflecting the terms of the buyer and seller.
Only when all conditions are met will the lender agree to fund the transaction. Once the funding takes place, the title company will request for the transfer of ownership to be recorded at the county recorder’s office. The buyer’s mortgage goes into effect as soon as the recording confirmation is received, and sale proceeds are released to the seller.
Who oversees the escrow process?
Each real estate transaction is assigned an escrow officer–whether it’s successful or not.
The escrow officer serves as the communications link, or the hub, for all the parties in a transaction.
Who is involved in the escrow agreement process?
1. The buyer
2. The seller
3. Listing agent
4. Selling agent
5. Termite company Lender
6. Title company I
7. Insurance agent
8. Homeowners Association (HOA)
9. Transaction coordinators within each of these parties
Who pays the escrow fees?
The escrow fees are customarily split 50-50 between buyer and seller in Southern California. Fee arrangements can vary by state and even regions within states.
See part 2 tomorrow