We opened Escrow! ….Awesome! What does that mean?

The Process, Step-by-Step

So we opened escrow!

…Awesome! What does that mean?

It means the seller accepted our offer and now it’s time for us to perform and get you those keys. There is a timeline and a schedule though. And lots of paperwork to be signed. So we will be on top of it on your behalf, but we will need you to sign docs and and be communicative in a timely fashion.

  • Initial deposit.
    • First 3 days of escrow opening our “Good Faith” deposit needs to be made. The escrow company will send you documentation on how to wire funds. The typical amount is 3% of the downpayment.
      • This basically says we are serious about this purchase and we are putting our money down to claim our stake. (It is refundable if things don’t turn out positively with the house)
  • Schedule an inspection.
    •  Most home inspections are based on square footage of the home. Budget between $300 and $600 depending on the size of the house. That will be paid immediately to the inspection company upon the completion of the inspection. Typically, we will schedule an inspection ASAP, from the date of opening escrow.
      • No need to delay, we are serious and want this home. Inspections usually last a few hours and a report is generated within 48 hours detailing the findings and recommendations.
  • Order an Appraisal
    • This is actually performed by the lender. The typical deadline for the “appraisal contingency” removal is 17 days since the opening of escrow. It’s contracted out to an appraisal company so neither the buyer, seller, or lender can bias the opinion of the the appraiser and home’s value.
      • Cost to the appraisal company comes from the lender, but estimate between $300-$500, unless it’s a multi-family unit or other type of income property outside a traditional residential property.
  • Request for Repairs and Contingency Removal
    • If there are major things wrong with the house and we are not buying “as is”, then we can ask for a request for repairs.
      • Essentially this informs the seller that there were some major issues we would like fixed or at least credited the money towards fixing them. It is a request and the seller has the option to deny the request. This is a case by case event. When we open escrow with you we will always negotiate on your behalf, but will also consult on the recommended actionable steps.
    • After we are content with the inspection and appraisal amount, it’s time to remove the contingencies.
      • We can and will individually remove the contingencies as they are completed. Inspection we are good with, we remove the inspection contingency. The last contingency to be removed is the appraisal contingency and we will wait until 100% clearance from the lender to do so. Once we are given the clearance, we remove all contingencies and essentially we are just waiting for the loan to fund.
  • Holding Title
    • Whose name is on the deed and legally owns the property.
      • You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.
  • Property Insurance
    •  If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property.
      • Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
      • Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts.
      • Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
  • Final Walk Through
    • Within 5 days of the close of escrow we do a final walk through.
      • More of a formality than anything else. Essentially this just makes sure that nothing crazy like a massive hole in a wall that wasn’t there before has happened.
  • Closing Time
    • Loan has funded. Rest of the deposit is made. All docs are signed and recorded.
      • Escrow will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller(s) will sign this statement, as well as escrow, certifying its accuracy.
      • If you are obtaining financing, you will have to sign all pertinent documentation required by the lending institution.
      • If you are unable to attend the scheduled closing, arrangements can be made depending on the circumstances and the notice that we receive.
        • Time to get the keys and take a big cheesy picture in front of your new home!

 

We will be happy to recommend experienced, knowledgeable, and reputable home inspectors, and insurance agents for every property type.

We also know great handymen, electricians, roofers, interior designers, general contractors, landscapers and almost any other service you can think of once you purchased your home.

We are ready to assist you should an unforeseen glitch pop up, even at this last stage. Something at the property breaks down, or some other minor detail – no need to worry. We have encountered these problems before so we know how to handle them efficiently and in a stress-free manor.

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