Wednesday, December 29, 2010

Offer Accepted! What's Escrow?

So, working with a new buyer, we sometimes forget that they don't really know what the heck 'Escrow' is!

Realtors, with experience, can practically do their jobs blind-folded, on auto-pilot. Those same Realtors know that our clients need us to guide them.

So, what happens after you finally get an offer negotiated and accepted? When do you get your new house keys?

Well, we do the Escrow thing. Open, go thru, and then, close Escrow. Yeah, that simple!

LOL....well, for the buyers it is pretty simple. For agents, we do a lot of behind the scenes work. A lot......if we're doing our job right!

So herein is the life of an Escrow. And, remember, Escrow is a third party, they ensure that the contract is kept to, and they can't change anything without all the principals agreeing.

Escrow is opened by the listing agent sending the Escrow Officer (EO) a fully executed (signed by all parties) contract.

The Buyer(s) bring their deposit check to escrow and, Wala, escrow is open!

With most purchase agreements, there is a contingency period. I sometimes call it the 'If This Happens' period. Most contingencies are on the buyers side. If the financing pans out, I buy the house. If the inspection is okay, I buy the house, etc. Therein, the 'If' factor. Also called by me, 'The Period of Discovery'. Buyers spend a couple of weeks discovering all they can about the house, guided by their agent, to confirm that this is the right home for them.

Title reports, Inspection reports, NHD reports, Seller disclosures, Appraisals. All of these are provided for buyer to assist in the If and Discovery.

Buyer is required to complete and review these in a timely manner. Bind the property with appropriate Hazard Insurance...AND...satisfy all their loan processing requirements.

Agents are required to make sure all this stuff really is happening in a timely manner.

The last couple of weeks is usually the stressful time. Lenders require additional items. We are pressing for a timely close. Where are those dang loan docs??? (Smirk)

What's a Loan Doc? A mountain of paperwork that buyer(s) sign to buy their home. Some items have already been signed during the Escrow period, they seem redundant, but they have to be signed regardless. Your hand will get a little cramped during escrow!

The Loan Docs are signed with your EO about a week to 10 days prior to COE (Close Of Escrow). They are then returned back to the lender for a final review and more T crossing and I dotting.

There are conditions, PTF (prior to funding) that have to be met. That is the EO and mortgage brokers responsibility. Then, and only then, we are set up to Fund.

Yippee! Make sure the buyers have scheduled their utilities as needed, call them when we have heard it Funded (the loan) and then.....the next day.......it RECORDS in the new buyer(s) name. That's when it's official. That's when the new buyer(s) really own the house they are going to call home.

That's when I have the greatest pleasure....making the call to my clients at COE to tell them they now own the home.....I just love that. Even better is presenting them with their keys at the front door.

Hope this post helps some of you. Remember, I can do this blindfolded.....you're not expected to. Don't worry, that's my job!

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