A GUIDE TO THE ESCROW PROCESS

  • Property Profile
  • Can be opened via email, in person, over the phone, or fax or deliver a copy of the fully executed Residential Purchase Agreement and Joint Escrow Instructions 
  • Escrow Instructions supersede original contract in changed items only
  • Escrow verifies with each agent prior to issuing Escrow Instructions
  • Agent should deposit earnest money into Escrow according to terms of original contract
  • Escrow verifies legal and vesting of current owner
  • Open title order
  • Order Preliminary Title Report (for Escrow and Lender)
  • When Prelim arrives:
    1. Check each item including Notes section
    2. Send out to clients for signature
    3. Send copy to all agents involved
    4. Discuss any unusual items with agent
  • Escrow holder needs new lender address, phone, and loan rep name ASAP
  • Escrow sends certified copies of Escrow Instructions to lender
  • Arranges for title company to send Prelim to lender as soon as issued
  • Signatures must be exactly as typed on Escrow Instructions (or amend)
    1. Sellers sign off as they are currently vested (marital changes)
    2. Let Escrow know if there has been a change of marital status
    3. Buyers have their choice of vesting (how do they want to hold title)
    4. If property is in a Trust, Escrow will need a copy of Trust, in certain cases
    5. Trust Certification will be required on properties in Trust
    6. If Power of Attorney is being used Escrow needs a copy of the recorded POA. If POA is not recorded Escrow needs original POA, for review by lender, title co. & recordation at the close of escrow
  • Forms required
    1. Preliminary Change of Ownership Report (Buyer)
    2. 1099 Input Form (Seller)
    3. Certification for No Information Reporting on the Sale of Principal Residence (Seller)
    4. Withholding Exemption Certificate and Nonresident Wavier Request (Seller)
    5. Trust Certification (Seller)
    6. On-Sale Report for Off-Street Parking Requirements & LB City Map – City of LB properties only (Seller)
    7. Los Angeles City Report and Certificate of Compliance – only applies to properties that fall within the white area of the Thomas Map (Seller)
    8. Statement of Information (Buyer and Seller)
    9. Insurance and New Lender Information (Buyer)
    10. Vesting Worksheet (Buyer)
    11. Information Request Form (Seller)
    12. Rent Statement, if income property (Seller)
  • 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 co. will hold money
    1. Existing FHA loans, Escrow sends out demands immediately to avoid penalties to seller.
    2. 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. If near the close of escrow, seller should make payment using cashiers check or money WILL be held at the close of escrow, by the title company
  • Escrow calls out missing items to agents; agents need to respond quickly to close escrow on time
  • Most agents order Termite Completion at this time
  • If all required conditions are in, loan documents will be ordered by Escrow
  • 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
  • Escrow reviews all lender conditions with Buyer during doc signing
  • Monies from the lender to title company must be from a wire transfer.
  • Even though property records, disbursement by Escrow Company, including seller net proceeds, cannot be made until title company verifies collectable funds and funds are wired from title company to the Escrow Company Bank