Escrow number issued, contract and deposit received by escrow
Opening the Escrow
After the buyer and seller agree to terms of a sale, the transaction goes into escrow, which can take several
weeks (30-45 days or more) to reach closing. Escrow can be opened by the buyer or the seller’s real estate agent. The escrow agent and their company act as a neutral third party for serving as custodian for funds and documents, providing a clearing house for payment of demands and performing clerical details for the closing.
What the Escrow Company Does
When the escrow is opened, an order for a preliminary report/commitment is placed with the title company, which shows ownership of a parcel of land and recorded matters that are relative to the property. Then a plan is set for the necessary action and documents required, such as demands for satisfaction of liens, instructions for recording documents and other requirements of the new lender. In most areas, buyers and sellers instructions are prepared for signature from the information gathered.
Escrow Instructions and Your Closing
Your escrow officer or real estate agent will contact both the buyer and seller for an appointment to sign escrow instructions and supporting documents.
Bring a legal form of identification with you, such as a current driver’s license, passport or ID card (military or state). At this time you will normally be advised of the amount of money you will need to deposit and/or receive depending on if you are the buyer or seller.
When the instructions from all parties have been executed, escrow is ready to close. At that time all required funds have been receipted into escrow, the documents are recorded, funds disbursed and the policy of the title insurance is issued.
If you are the buyer, you will be informed about the disbursement of keys by the real estate agent or seller.
If you are the seller, upon receipt of the proper documentation and releases, the escrow officer will disburse the reserved funds, including the seller’s payment.
As of October 3, 2015, the closing process has changed.
The Consumer Financial Protection Bureau (CFPB) created the TILA-RESPA Integrated Disclosure (TRID) Rule to improve mortgage disclosure forms to make it easier for consumers to understand the terms of their loans and closing costs.
Learn MoreThe Escrow Process
Preliminary Report/Commitment is prepared and distributed for review.
Additional terms and appropriate invoices from companies such as termite companies, homeowner associations, roofers, inspection companies, home warranty companies etc. forwarded to the Escrow Officer.
Closing Disclosure sent by the lender or escrow officer to the buyer for review.
Seller Closing Disclosure sent to the seller by the Escrow Officer Estimated Settlement Statement sent to the respective buyer’s and seller’s agents
Escrow receives loan documents and lender instructions for scheduling the signing
After a signing date is scheduled, Buyer and Seller to bring valid ID to the signing appointment. Buyer brings funds to close.
Signed documents are returned to the lender and funds are requested to close
Funds are received from the lender and documents sent to the County Recorder for recording.
Confirmation of recording is received, funds are disbursed, final settlement statement is prepared and final CD is sent to the buyer by the lender or Escrow Officer.
Escrow is now closed. Keys are typically delivered by the agents or the seller to the new homeowner and the Owner’s Title Policy is delivered by mail.
TRID Terms
- Closing Disclosure
- Consummation
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Loan Estimate
Loan Estimate
A three-page Loan Estimate (also called LE) must be provided to the consumer no later than three business days after they submit a loan application for most mortgages. The Loan Estimate provides information about key features, costs and risks of the mortgage loan for which the consumer is applying.
- Redisclosure
- Three Day Review Period