Part I of a series on the escrow process. Thank you to Kartikay Escrow for contributing portions of this blog.
The escrow process can be complicated, but a good escrow company with good escrow officers will help make it as simple as possible.
Even the best deal on a new home involves a whole lot of paperwork and a substantial amount of money being exchanged. To ensure that everything is completed at or near the date the deed is recorded to show new ownership, the necessary funds, documents, and instructions are placed with a neutral third-party into an escrow account. The signed sales contract, along with other information, acts as a set of instructions for the escrow officer. Escrow is a process, and since each home purchase is different, each escrow is unique. A depth of knowledge and experience keeps this process as smooth as possible.
What do I need to open an escrow? Below is an overview of the necessary documents.
- A Legible Contract A faxed copy may not be legible, and an unsigned copy should accompany a signed contract.
- A Fully Executed Contract A faxed or email copy will suffice to get the process started BUT escrow is not allowed to release any documentation to anyone until a fully executed contract is received and the Buyer’s Initial Deposit is received.
- Commission Percentage For Listing Agent and Selling Agent
- Buyer and Seller contact information
- Statement of Information Seller(s) needs to provide within 7 days of acceptance.
- Lender Contract
- Buyer’s Legal ID ( copy if possible) To help confirm both the legal name and its spelling. Buyer(s) signature must match ID.
- Vesting Vesting of Buyer(s) is very important. This will help with sending out the Grant Deed with complete information. If Buyer(s) is purchasing a short sale, the name can’t change from the name on the contract.
Other documents that could be required depend on a number of “IFs.” IF the home is in a trust, IF Seller(s) are now divorced, IF they were single when they purchased the property but are now married, IF the Buyer(s) will be married before the transaction closes, IF any of the parties are deceased, IF Buyer(s) and/or Seller(s) are in a LLC or Partnership. In addition to these “IFs” there are many other possible “IFs,” and your Escrow Officer will be able to help you sort out what you’ll need.
Next blog will be on escrow Red Flags!
If you are ready to jump into escrow on a property, don’t forget to contact me. I will work with escrow to make the process as smooth as possible for you.