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.
Title Company
- 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
Lender Coordination
- 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
Processing of the Escrow:
- 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
Forms required:
- 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)
Demands/Payoffs
- 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.
Loan Approval
- 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.
Loan Documents
- 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!
The Funding and Recording
- 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.