At REX, we’re your trusted advisor through listing, selling and closing. Our clients rely on us to guide them through the sometimes daunting escrow process.
Steve Dawson, managing broker at REX, says, “Be flexible and have an understanding that escrows have a lot of moving parts. There are a lot of different professionals involved in escrow transactions, and we’re here to execute a timely and successful closing.”
What is the escrow period?
The escrow period, generally 30 to 60 days, starts at purchase contract signing and ends at closing. Managed by an escrow agent or title agent, which could be a business or an individual, an escrow company is a neutral third-party that gathers and holds all of the items necessary to secure the sale and financing of a home, such as documents and funds.
At REX, you can bring your own escrow agent or REX will suggest options for you
The escrow process is meant to protect both buyers and sellers and to neutralize risk. Once all agreed-upon conditions in the contract are met and closing documents are signed, the buyer gets the home and the seller gets the money.
What happens during the escrow period?
- Buyer’s earnest money (good faith deposit) is received.
- The home is inspected.
- Any inspection issues are resolved.
- The bank appraises the property.
- The bank approves the buyer’s loan.
- A title search to find any liens, encroachments, easements, etc. is conducted and cleared.
- Insurance (title insurance, hazard, etc.) is obtained.
Buyer and Seller Tip: Both parties should make sure they are reachable by phone and that they avoid activities that would prevent them from quickly answering questions, sending documents, or signing forms as any delay could mean delaying the closing.
Your REX team will take care of everything you need during escrow and facilitate information gathering. Here is what you can expect:
What are the buyer responsibilities during escrow?
- Commission a home inspection.
- Review the inspection report and negotiate (if necessary) with the seller.
- Provide necessary paperwork to a bank to secure a mortgage.
- Get quote for homeowner’s insurance and provide to lender.
- Indicate how the title is to be held (sole ownership, tenants in common, joint tenancy with right of survivorship, community property, living trust).
- Request an estimated closing statement.
Buyer Tip: Have all of your financial paperwork in order before you go into escrow. Document all sources of income and debt, things like proof of stocks you were gifted, alimony information, and canceled rent checks.
Expect to learn new things about the house from the inspection report. These are usually small things but, if not, we can help you understand how they might impact you.
What are the seller responsibilities during escrow?
- Come to agreement on any buyer concerns over the inspection report.
- Provide your loan paperwork, if applicable.
- Provide information on property taxes, insurance, homeowner’s fees, etc..
- Respond to any title issues.
Seller Tip: Request a title report before you put the home up for sale to avoid any last-minute surprises. Don’t be alarmed if the inspection report finds things you didn’t expect.
The buyer may request that you to make repairs before the close of escrow or ask for credits so that they can make the repairs. These requests are typically small issues and can be handled quickly.
We can discuss the changes and help weigh the costs and benefits with you.
Tips for a smooth escrow
Do not be afraid to ask questions if you don’t understand a document or to check in with your bank, escrow company or REX agent. You want to avoid changing your debt to credit ratio by opening up new credit cards, making big purchases or taking out new loans during escrow.
Quitting your job (or losing it) is also not recommended. At the closing, signing documents will take at least 60 minutes. The escrow officer will explain each document and then you will sign.
Remember that all people taking title (having ownership rights to the home) will need to bring their IDs and sign
Above all, Dawson recommends, “be responsive if your agent or an escrow officer calls you to ask for missing information.” Your REX agent will be with you to help avoid any delays, but some are not preventable.
“In the end we all want to help you achieve your goals,” says Dawson.