What to Expect During Escrow

The escrow process is a mystery to many real estate consumers, especially first time home buyers. What happens during this period, and what should you expect? If everything in the transaction goes according to plan, it should be smooth and seamless. But, as they say, always expect the unexpected.

The escrow process is basically taking this very complicated financial transaction involving large sums of money and property and then putting it into the hands of a neutral third party. When a buyer makes a purchase offer in California, the standard purchase offer form is also a set of escrow instructions. If the seller agrees with all of the details, he or she signs the contract, and an escrow account is opened at the mutually-agreed upon escrow company (such as Placer Title).

The escrow officer gathers all the documentation from both sides of the transaction, plus the buyer's deposit check. This check is deposited in an escrow account, and all sides must agree before the money in the account is transferred. That is one reason why an impartial third party is so important.

Another role that the escrow officer takes is making sure the buyer's financing paperwork and the seller's loan payoff information is all in order. Then they will prepare all the necessary documents and closing statements needed to transfer the property from the seller to the buyer. This also includes handling any title paperwork with the city and county, as well as arranging title insurance.

Sometimes disagreements arise during the escrow process, and the escrow officer is there to facilitate getting all parties in agreement. Sometimes the contract and paperwork needs to be amended. But, sometimes, an agreement cannot be reached and the transaction is cancelled; in which case, the escrow officer will oversee the transfer of any monies in the escrow account.

This is just a simple overview of the escrow process, and there are many more aspects to it than this. Of course, it can also become complicated and sticky, but we are always thankful when it works out smoothly. If you have questions on the escrow process and how to make it go as easily as possible, just let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.