What Is Escrow? In a nutshell, escrow begins when your earnest money deposit and purchase offer is accepted by the seller. Escrow ends when you become the official new owner, registered in the county records.
Title Company and Escrow Holder: I can help you select a title company and escrow holder (often the same company), whose job it is to act as a neutral third party which holds all instruments necessary to the sale, including funds and deed with instructions as to their use. The title company will research the complete recorded history of this property, to insure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. You will receive a “preliminary report” that will show current encumbrances and easements. For example, some properties are subject to CC&Rs (covenants, conditions and restrictions) which may limit various activities from building to parking restrictions. There may be recorded easements and encroachments, where others have limited rights to use your property. I will always explain the title report to you in detail.
How to Hold Title: How will you own the property? By yourself, or with someone else? There are at least half a dozen ways to own property, each with its own legal, estate, and tax implications, particularly with respect to selling or transferring, or disposition upon death. It advisable to consult with an attorney or your tax advisor to be sure you select the best way to hold title.
Inspections: Once your offer is accepted by the seller, I will recommend professional inspectors to evaluate your home’s major systems. I will even set the appointments for you. Plan on attending all of your inspections with me and feel free to ask any question that comes to mind of either the inspector or your agent. During these inspections, you can learn a lot about how your new home functions as well as anything that may be wrong with it. I may recommend other inspections, including but not limited to roof, chimney/fireplace, property boundary survey, well, septic, pool/spa, arborist or mold. Knowledge is gold.
Appraisal and the Loan Process: Keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. The lender will often send an appraiser out to the property and you may pay a fee for this service. Appraisers are specialists in evaluating properties, based on a combination of square footage measurements, building costs, and recent sales of comparable properties, all to make sure you are not paying too much for the property. Ask for a copy of your appraisal. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.
