At REX, our service doesn’t stop when an offer is accepted. We guide our buyers and sellers through the sometimes daunting escrow process. In escrow, there are a lot of moving parts and a lot parties involved and it is our job to navigate that process and execute a timely and successful closing. We’ve compiled some helpful info and tips to be aware of during escrow…
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.
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.
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.
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. Make sure you are 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.