Buying a Home → Finding The One
After mutual acceptance, buyer and seller are considered to be "in escrow." As we learned in Step 1; Blog titled What is Escrow?, “Escrow is a neutral third party that handles the exchange of real property and funds, provides a place to sign on the dotted line, and files to record closing documents with your county, often referred to as the ‘closing agent’.”
The first interaction a buyer will have with their escrow company is the deposit of earnest money. Earnest money is a deposit made by the buyer in good faith of their honest interest to purchase the home. The seller will in turn remove the property from the market while the buyer works through inspections, seeking financing, appraisal, and all other steps toward closing. When the property closes, escrow will apply the earnest money to the cash needed to close or refund the earnest money to the buyer if no cash is required.
After earnest money is deposited, escrow will reach out to both parties with an initial package to open escrow. This package will be filled out by both parties and outlines their contact information among other items. As with all documents provided from escrow, title, lending, or your agent, it is important to complete and return them as soon as possible to avoid delays in your transaction. After the initial package to open escrow is returned, your interactions with escrow will slow until closing approaches.
Within the last week of closing, expect to be contacted from escrow to schedule signing and confirm your cash needed to close. Escrow will work with the lender and agents to secure all documents needed for each party’s signing package. Typically, you’ll sign your closing documents a day or two prior to your actual closing date. Escrow will work with you to schedule a time and location that is convenient. If a party is unable to sign at the escrow’s office, then a notary may be assigned to assist with an off-site location. If the parties are required to bring cash to close, escrow will instruct them how much money to deliver and how to deposit the money. Most commonly, cash to close takes the form of a wire transfer or cashier’s check. (As a side note, please heed all warnings provided to you regarding the dangers of wire fraud.)
After signing has been completed and funds have been deposited by either the buyer or lender, the escrow company will organize the paperwork as needed for submission to the county for recording on closing day. The county will provide closing numbers to escrow once the transaction has recorded, at which time the transaction is complete!