HomeReal EstateNavigate The Escrow Timeline With These Helpful Tips

Navigate The Escrow Timeline With These Helpful Tips

Maybe you’re reading this because you recently accepted an offer on your house. If that’s the case, congrats! Perhaps you’re considering selling your home and want to know more about the process. In any case, you’ve come to the correct location. So, how long should it all take? Should I make use of an escrow timeline? What comes next?

Every transaction is unique, but Escrow typically takes 30 to 60 days to conclude. You and the buyer agree on an escrow timeframe during contract negotiations.

How Does Escrow Work In California?

Before selling your property, ensure the escrow procedure is as stress-free as possible. Use a licensed and certified escrow agency to do this. In California, the title company and the escrow firm are often independent entities.

However, the title business handles the Escrow internally in certain parts of Northern California, most notably the Bay Area and San Francisco. It’s typical to practice in attorney states like Illinois and Georgia for an attorney to handle the Escrow.

Escrow Timeline
Image Credit: Learn.g2

Outside of California, the word “escrow” is not as often used as it is in California. The term “escrow” may have different implications depending on the transaction’s jurisdiction. So, before you purchase or sell a house, understand what Escrow means in your state.

There are necessary closing charges, including Title Insurance fees, Escrow fees, Transfer Taxes, Prorations for Property Taxes, etc., regardless of how you sell your home—traditional real estate agent or for sale by owner.

The buying contract will specify who is responsible for the remaining closing charges. In reality, however, most locations have a set policy for what is acceptable. For example, here’s a breakdown of who typically pays what closing fees per county in California.

Now that you understand some of the subtleties of the California escrow procedure and how it varies from other states, continue reading to learn more about what to anticipate.

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Escrow Timeline Process:

Much documentation will be required to be completed during the first week of Escrow, including disclosures about the house, a property questionnaire, and agency disclosures, to mention a few.

Day 1: Pre-Escrow

Escrow starts if the seller accepts an offer to acquire the property and a signed purchase agreement document.

Day 2-5: Escrow Is Funded

The buyer’s real estate agent puts a portion of the down payment into the escrow account. It guarantees that the purchasers put some money down and demonstrate their sincerity about the acquisition.

Typically, the package will contain a notarized grant deed, escrow instructions, commission instructions, tax papers, a Statement of Information, and payoff documents. For Escrow, title, and the lender to proceed, the seller must return these papers to Escrow promptly.

Escrow Timeline
Image Credit: Homeebay

Day 3-20: Disclosures & Inspections

The purchasers do their due diligence and inquiries on the property. During this time, the buyer must be allowed to see the property. The seller must also maintain all utilities until the conclusion of the Escrow. The buyer is given a list of disclosures concerning the home or property required by state law.

View a list of house selling disclosures in California. The disclosures include recognized hazards or deficiencies for that location or age of the home, such as a leaking roof or flood insurance. Buyers profit from exposures since they are aware of any flaws in the property. Disclosures help sellers since they feel the buyer included known defects in the agreed-upon price; as a result, the seller will be less eager to lower the cost during discussions.

The next step is to get the house inspected. It is possible to find out whether a system needs fixing by having a general contractor check it for you.

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Day 20+: Price Negotiations Based On Inspection Findings

Following the inspection, the buyer may make a Request for Repairs, which will either request that the seller correct a fault or provide a credit, depending on their inspection results. After selecting, the buyer signs the inspection findings, erasing their inspection contingency.

Unless the house does not appraise or the buyer is unable to get financing, the buyer cannot back out of the agreement at this time without forfeiting the deposit. The seller may either agree to the repairs or negotiate a lower price to compensate for the necessary repairs.

An appraiser will walk out to the property if the buyer’s offer contains an appraisal contingency. Every residence in California is required by law to have smoke detectors, carbon monoxide detectors, and a double-strapped water heater.

The appraiser will check it. During this visit, they will take notes on the property, measure the square footage and lot size, and check that it corresponds to the tax assessor’s information.

Escrow Timeline
Image Credit: Homeebay

Day 24+: Buyer Secures Funding

The buyer must undertake practically all of the work in the next stage of the procedure. Appraisals must be performed, homeowner’s insurance must be obtained, and the buyer’s lender must authorize finance. Once finance has been acquired, the loan condition will be eliminated.

Title Searches & Insurance:

Closing will occur after all funding and other conditions have been met.

1. The Title Company does a title search first, and most contracts require the seller to give the buyer a free and clear title.

2. The buyer may then get title insurance. Although title insurance is not needed for cash transactions, most purchasers prefer one to safeguard their interest in the title. The lender will almost certainly want title insurance if the buyer obtains finance. The buyer does the last title search to ensure that the title is free and clear.

3. When everything is said and done, the buyer’s lender will transmit the final loan documentation to the seller’s escrow agent or attorney.

Within The Final Five Days – The Close Of Escrow:

The buyer will do a final walk-through inspection to confirm that the property is in the same condition as when the offer was made. Similarly, the buyer might check to verify whether all of the desired fixes were implemented.

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If everything goes as planned, the Verification of Property will be signed by the buyer and seller as the last piece of paper. The buyer subsequently pays the remaining down payment, closing costs, and other fees to the escrow company. The money is distributed, and the closure is complete after the deed is registered.

Frequently Asked Questions (FAQs):

How Long Does It Take For The Escrow Procedure To Complete?

Typically, the escrow procedure takes 30-60 days to complete. The timing might vary based on the buyer and seller’s agreement, the escrow provider, and other factors. On the other hand, the escrow procedure should not take more than 30 days.

What Occurs During The Second Week Of Escrow?

The second week of Escrow is often the “Decision-Making” week, during which the lender makes its final choice to approve your loan, and you evaluate all documents to make your final decision about purchasing the house. For final loan approval, your lender’s underwriter may seek further paperwork.

What If Escrow Doesn’t Close On Time?

As long as there are no conditions in the contract, there should be no penalty if an escrow procedure does not conclude on time. However, the delayed party (buyer/seller) must request more time from the other.

How Can I Quicken The Escrow Process?

With the correct escrow provider, you won’t have to worry about a delayed or inefficient escrow. There is no better way to meet that 30-day deadline than by selecting an escrow firm that promises speedy and secure escrow services without sacrificing quality.

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