Now that you’ve accepted an offer from your perfect buyer, it’s time to open escrow. We have helped hundreds of clients successfully navigate this sometimes tricky legal landscape. We’re ready to do the same for you.
What Is Escrow?
Whether you are the seller or the buyer, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. An escrow company is an impartial third party between the seller and the buyer with the legally-regulated obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
Disclosures.
Disclosures are generated by you, the seller, and may vary based on property type, but often include things like known flaws with the property,prior improvements or repairs, and known environmental hazards. These disclosures are based entirely on your non-professional knowledge, and are intended to give any Buyer some insight into the condition of the property based on your experience during time of ownership. Think along the lines of“We replaced the windows last year”, “Crack in driveway” or “The roofleaks”… not a substitute for, but rather a supplement to any professional inspections a buyer might conduct.
Inspections.
The buyer may elect to perform inspections on the property, as agreed upon
in the contract. These inspections must be completed by a certain date,which is called the inspection contingency date. The types of inspections vary by property type and situation (and locale), but common inspections include a general physical inspection, pest inspection, roof inspection,chimney inspection, and sewer inspection.
Repairs and Credits.
Based on the content of the seller’s disclosures and the outcome of any inspections performed, buyers may elect to ask the seller for repairs, credits,or a reduction in the sale price. Sellers have three options: (1) agree to all of the buyers’s requests, (2) offer a modified solution back to the buyer, or (3) decline to make any amends. In response, the buyer can continue tonegotiate, accept the seller’s position, or in some cases, end the transaction and recoup their earnest money. We can help advise you on a reason ablecourse of action.
Title.
During almost all escrows, a Title Company will examine and in sure title to the real estate in question. After researching the complete recorded history of your property, they’ll certify that (1) your title is free and clear of encumbrances (eg. mortgages, leases, or restrictions) by the Close of Escrow, and (2) all new encumbrances are duly included in the title. When a preliminary report is drawn up at the end of the process, we will go over it with you in detail.
Loan Approval and Appraisal.
While any qualified buyer will include a pre-approval package with their offer (we will make sure that they do!), buyers have a window of time while in escrow to finalize the loan. The bank will take the time to dive deeper into the potential buyer’s finances to ensure they can take the loan. Expect an appraiser from the lender’s company to review your property and verify that the sales price is appropriate for their needs. If your buyer is “all-cash” then these steps will usually be bypassed.
Renegotiation.
When a renegotiation is demanded on any item, you can be sure we will act fairly while keeping your best interests in mind. This is when a professional listing agent can make a real difference in the outcome of the transaction.We guarantee our expertise and total commitment to every client, no matter what their situation. We will find a path to your goals.
Contingencies.
A contingency is a condition that must be met before a contract becomes legally binding. These can include a physical inspection, title review, ability to obtain financing, appraisal, and insurance, among others. If any are requested, the negotiation of repairs and/or credits will be a contingency forclosing an escrow. Only once all contingencies have been met and removed will an escrow “close”.