A Guide To The Escrow Process

Opening Process

Provide a copy of the purchase contract and all counters/addendums.
Escrow verifies with each agent or party prior to issuing Escrow Instructions.
The Selling Agent should deposit the good faith deposit into Escrow according to the terms of the contract.

Escrow verifies legal and vesting of current owner with the title company
Opens title order & orders the Preliminary Title Report
When Prelim arrives; Escrow will:
– Review preliminary title report
– Send out to clients for approval
– Send copy to agents & lenders
– Discuss any items of concern with agents/lenders/principles

Escrow holder needs new lender address, email address, phone number, and loan rep name ASAP!
Escrow will send to the new lender:
– Certified copies of Escrow Instructions
– Preliminary Title Report
– Certified Copy of deposit funds
– Purchase Contract with escrow acknowledgment
– Opening escrow and title fees

Ask all parties/agent to review/read escrow instructions before signing
Parties should sign Escrow Instructions exactly as typed (or amended)
Sellers sign as they currently hold title
Let Escrow know if there has been a change of marital status
Buyers have their choice of vesting (how do they want to hold title)
If property is in a Trust, Escrow will need a copy of Trust, in certain cases
If Power of Attorney is being used, Escrow needs a copy of the recorded POA. If POA is not recorded Escrow needs an original POA, for review by lender, title co. & recording at the close of escrow
If Seller is deceased, other documentation may be need, so ask your officer

Preliminary Change of Ownership Report (Buyer)
1099 Input Form (Seller)
IRS Certification (Seller)
Withholding exemption certificate (Seller)
Trust Certification (Seller), if needed
Statement of Information (Buyer and Seller)
Insurance and New Lender Information (Buyer)
Vesting worksheet (Buyer)
Existing Loan Request form (Seller) (Demand for Seller’s loan can’t be ordered without this!)
Rent Statement, if income property (Seller)
Any City Report required in a city that has pre-sale inspection requirements!
HOA information
593 Form (Cal-Firpta)

Escrow calendars and orders demands to coincide with the close of escrow for all existing loans on property.
Demands MUST be current at the close of escrow, or title company will hold money.
On existing FHA loans, escrow sends out demands immediately to avoid penalties to seller.
(If it closes into the next month, seller is charged for the whole month)
At listing appointment, agent needs to inquire about existing loans on property.
Lender has 21 days to respond to demand request
Seller should continue to make payments on existing loans.

Escrow calls out missing items to agents; agents need to respond quickly to close escrow on time
Most agents order Termite Completion at the time of loan approval, if applicable.
If all required conditions are in, loan document will be ordered by the lender.

Some loan documents need sellers signature; some require the real estate agent’s signature
Final monies into Escrow must be in the form of a wire transfer
Buyers need to bring their drivers licenses or passport for notary purposes
The signature of the borrowers must be exactly as they are typed on the loan documents.
Docs must then go back to lender to be reviewed!

After the Lender Reviews the docs they will fund the loan (usually 24-48 hours)
The Funds from the lender go to the title company, then it records the next day.
When funds are received by escrow from the title company, the funds are balanced by the officer and disbursed to all parties.

Congratulations, Your Escrow is Closed!!