What Is Escrow?
|Escrow is the process that buyers and sellers of homes use to complete the monetary and legal details of a sale. A neutral third party manages the escrow, called an “Escrow Officer,” who generally works for a title company. “Title” is the proof of ownership of a property. The title company ensures that all terms of the contract are adhered to before the sale is complete and money changes hands.
In order to successfully bring an escrow to close, the title company will:
When these details are complete, the Escrow Officer requests the funds to be released and instructs the title department to record the transaction at the County Recorder’s Office, thereby closing escrow.
The Sale Process
|While there’s no such thing as a typical home sale – each has a character and a flow of its own – there are certain aspects you can expect. While local real estate practices may vary, here are the basic activities that occur during the transaction, from receiving an offer to closing escrow.|
Managing The Details
|Once you have negotiated a contract and agreed on a sales price, the next phase of our job begins. Below is a list of some of the details I will be managing through this process.
Seller Disclosures 101
|During the escrow process, you must inform the buyer of specialized conditions that affect your home. These may include the following conditions:
The six zones are:
If an NHD is delivered to the buyer after both parties have signed the Purchase Agreement, the buyer will have three days to rescind the agreement. However, if the buyer received the NHD before they signed the Purchase Agreement, then they cannot use the NHD to rescind.
Basically, a “Mello-Roos Community Facilities District” is formed by a local government, district, or agency to finance public services and facilities including police and fire departments, ambulance and paramedic services, parks, schools, libraries, museums and cultural facilities.
The buyer will be required to make monthly payments, known as regular assessments, to maintain common areas, as well as special assessments to replace a roof or repair the plumbing, as determined by the homeowner’s association (HOA.)
Condominiums also may have regulations regarding architectural requirements, limitations on pets, and age restrictions (i.e., senior housing). These must be formally disclosed to the buyer during escrow. You may provide this information via the following documents, to the extent that they exist and are available:
Many smaller HOAs will not have all of these documents, but must provide what they do have.v
Who Pays For What?
|A major question in every escrow is: “Who pays for what?” The answers vary by county ordinances and standard practices. What is listed below are “customary” practices. All fees charged are governed by terms of the sales contract and other written escrow instructions. Note: on some FHA, VA or other government-backed loans, the buyer will pay some fees that governmental regulations will not allow you to pay.
Seller’s Generally Pay:
Buyer’s Generally Pay: