Surviving the Escrow Process
For anyone that has bought or sold real estate before, they know firsthand that the escrow process can be the most nerve-racking element of the entire transaction. But it certainly doesn’t have to be.
In the simplest of terms, escrow is a process that provides for a fair and equitable transfer of real estate property from one party to another. To facilitate that goal, escrow provides the means for depositing – with a neutral third party, the escrow officer – the funds, documentation and instructions necessary to complete the sale.
Because most real estate transactions involve large sums of money and what may seem like endless amounts of documents, the escrow process is filled with minute details, step-by-step procedures and many opportunities for challenges.
Whether you are the buyer or seller, your understanding and cooperation in the process can make a remarkable impact on how smoothly the escrow process goes.
Respond quickly to all correspondence. Once escrow is opened, you will be receiving multiple packets and forms that need your attention. Reply immediately. Because escrow often needs to follow a sequence of events, the hold-up of a particular item can unwittingly delay many other important items along with it.
Be available. Besides insuring that you will be available on the actual Close of Escrow day, it’s critical to be reachable throughout the entire process. Avoid going on vacation or taking on other time-consuming projects.
Be proactive. If you are the seller, inform the escrow officer well in advance if there are any liens or judgments encumbering the property. If you are the buyer, inform your lender about any changes to employment, income, debt ratios or credit rating that may have occurred during the escrow process. Buyers also should have your homeowners’ insurance policy all set up and ready to take effect as soon as you close escrow. Start this process early, as some homes may have insurability issues or require special coverage that could cause delay.
Prepare the proper funds. Follow your escrow officer’s instructions regarding the acceptable form of monies. Don’t arrive with a personal check, as the processing of a personal check can take five to 10 days. Generally, a cashier’s check or wire transfer of funds is required to close on time.
Be informed. If you have secured a loan for the purchase of the property, understand all pertinent loan documentation ahead of time. The day that escrow is scheduled to close is not the time to be raising concerns about your loan program or interest rate.