So you have found the home of your dreams and you have the money to buy it.
You put in an offer and low and behold, it's accepted, you my friend are in Escrow.
Do you feel like asking yourself, "What does that mean exactly?"You are on your way to owning your very own home, congratulations! The Escrow process is fairly straight forward but can be complicated by a number of roadblocks thrown up by either side of the transaction.
It is important to consult with and follow the advice of and experienced Realtor in your area to ensure that the process will go as smoothly as possible.
First you will be asked for a good faith deposit to be deposited in escrow.
Your deposit check will be cashed, so make sure that you have sufficient funds in the account.
Assuming the sale goes through, this money will be applied to the purchase price of the home.
If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back, less standard cancellation fees.
In certain instances, the seller may be able to retain this money as liquidated damages.
Prior to executing a purchase contract, it would be wise to speak with your counsel regarding whether or not it is your best interest to have a liquidated damages clause as part of the contract.
The roll of the escrow company will be to hold your deposit and coordinate much of the activity that goes on during the escrow period.
During this period the escrow company will act as an independent third party so that you know when and whom to give your money, to get the deed to your new home.
You will be asked for a down payment on the home you are purchasing by your mortgage broker.
The amount you put down is usually determined by a percentage of the purchase price,but remember, the more you put down toward the total price of your home, the less time it will take you to pay off and the less your mortgage payments will be every month.
The time period that you are "in escrow" will be predetermined in your purchase agreement with the seller.
A standard and fairly efficient escrow period is often 30 days, but may be longer or shorter.
During this time, each item specified in the contract must be fulfilled in a manner agreeable to both sides.
Your purchase contract will also have included the escrow closing date and the contingencies.
Keep in mind that every contract will be unique but it may be likely that yours should include: 1.
Inspection Contingency: this should be completed as soon as possible after the contract to purchase is signed.
If an inspection comes back with negative results there is a possibility that you may want to consider canceling the contract.
2.
Financing Contingency: once the contract is signed, you have a period of time to secure funding.
If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and take your chances on getting a loan.
3.
Clear Title: A requirement that the seller must provide marketable title.
Have an attorney or title officer review the title report for the property.
The title must be "clear" to ensure that you do not have legal issues regarding your ownership or that may affect resale.
It is important to procure homeowner's insurance.
It will most likely be required before you can close the sale and is a great way to protect yourself.
It is in your best interest to apply for insurance as soon as possible after the contract is signed.
Acquiring the insurance may require a lengthy period of time especially if you are required to obtain special policies such as fire and earthquake insurance.
Remember to contact your local utility companies.
You will need to schedule service activation to coordinate with the close of escrow.
This way when you are able to move in you will have use of all of your appliances and lighting.
Moving furniture in the dark is no picnic.
Schedule the final walk-through inspection and take your Realtor with you 5 or so days before you are scheduled to close escrow.
At this time that make sure that the property is exactly as the contract says it should be.
What you thought to be a "permanently attached" chandelier that would come with the property might have been removed by the seller and replaced with a different fixture entirely.
Walk through and make sure that you got exactly what you paid for.
Congratulations, you've made it through your first escrow! Once the sale has closed, you will be the proud owner of a new home.
You put in an offer and low and behold, it's accepted, you my friend are in Escrow.
Do you feel like asking yourself, "What does that mean exactly?"You are on your way to owning your very own home, congratulations! The Escrow process is fairly straight forward but can be complicated by a number of roadblocks thrown up by either side of the transaction.
It is important to consult with and follow the advice of and experienced Realtor in your area to ensure that the process will go as smoothly as possible.
First you will be asked for a good faith deposit to be deposited in escrow.
Your deposit check will be cashed, so make sure that you have sufficient funds in the account.
Assuming the sale goes through, this money will be applied to the purchase price of the home.
If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back, less standard cancellation fees.
In certain instances, the seller may be able to retain this money as liquidated damages.
Prior to executing a purchase contract, it would be wise to speak with your counsel regarding whether or not it is your best interest to have a liquidated damages clause as part of the contract.
The roll of the escrow company will be to hold your deposit and coordinate much of the activity that goes on during the escrow period.
During this period the escrow company will act as an independent third party so that you know when and whom to give your money, to get the deed to your new home.
You will be asked for a down payment on the home you are purchasing by your mortgage broker.
The amount you put down is usually determined by a percentage of the purchase price,but remember, the more you put down toward the total price of your home, the less time it will take you to pay off and the less your mortgage payments will be every month.
The time period that you are "in escrow" will be predetermined in your purchase agreement with the seller.
A standard and fairly efficient escrow period is often 30 days, but may be longer or shorter.
During this time, each item specified in the contract must be fulfilled in a manner agreeable to both sides.
Your purchase contract will also have included the escrow closing date and the contingencies.
Keep in mind that every contract will be unique but it may be likely that yours should include: 1.
Inspection Contingency: this should be completed as soon as possible after the contract to purchase is signed.
If an inspection comes back with negative results there is a possibility that you may want to consider canceling the contract.
2.
Financing Contingency: once the contract is signed, you have a period of time to secure funding.
If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and take your chances on getting a loan.
3.
Clear Title: A requirement that the seller must provide marketable title.
Have an attorney or title officer review the title report for the property.
The title must be "clear" to ensure that you do not have legal issues regarding your ownership or that may affect resale.
It is important to procure homeowner's insurance.
It will most likely be required before you can close the sale and is a great way to protect yourself.
It is in your best interest to apply for insurance as soon as possible after the contract is signed.
Acquiring the insurance may require a lengthy period of time especially if you are required to obtain special policies such as fire and earthquake insurance.
Remember to contact your local utility companies.
You will need to schedule service activation to coordinate with the close of escrow.
This way when you are able to move in you will have use of all of your appliances and lighting.
Moving furniture in the dark is no picnic.
Schedule the final walk-through inspection and take your Realtor with you 5 or so days before you are scheduled to close escrow.
At this time that make sure that the property is exactly as the contract says it should be.
What you thought to be a "permanently attached" chandelier that would come with the property might have been removed by the seller and replaced with a different fixture entirely.
Walk through and make sure that you got exactly what you paid for.
Congratulations, you've made it through your first escrow! Once the sale has closed, you will be the proud owner of a new home.
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