The 5 Stages of Escrow – by Team DREP
Stage 1-Opening of Escrow
- Escrow receives the fully executed contract and assigns escrow number
- Escrow issues wire instructions to the buyer for the Earnest Money Deposit (EMD).
- Copy of the purchase contract is sent to the lender. (If loan is involved)
- Home Inspection is requested, and date is set (if doing a home inspection)
Until your deposit is received by escrow, not much will be happening. Once received, then off we go.
Always confirm the wire instructions with escrow, if you receive a call, text or email that seems “off”, call us right away.
Stage 2 – Escrow receives deposit and issues Escrow Instructions
- Escrow confirms receipt of the buyer’s Earnest Money Deposit (EMD)
- Escrow enters your file in line to type up the escrow instructions
- Escrow Orders the Prelim Title Report
- Listing agent will order Inspections and Reports as agreed to in the contract (Termite, Septic, NHD Report, etc)
- The lender will send their request to escrow for the estimated buyer sheet so they can start their file
- Lender will order the appraisal and will coordinate the appraisal date with the seller’s agent
- Listing agent sends to the buyer agent the Seller/Broker Disclosures. We will always review these with our clients and point out any concerns
- Escrow will order HOA Documents (If located in a HOA Development) *
*Escrow will obtain instructions from the HOA Management Company for the HOA documents for the buyer’s review. The seller will need to pay upfront; most HOAs have online systems for sellers to pay them directly.
Stage 3 – Removal of Contingencies
- Receive and Review the Home Inspection, Termite Inspection, Natural Hazard Disclosure Report
- Buyer submits Request of Repairs (if any)
- Buyer to remove Inspections/Appraisal/Loan/Replacement home contingencies*
Stage 3 is the busiest and can more the most stressful. Lots of moving parts are happening, negotiations between the buyer and seller for repairs/credits, etc. But don’t worry we got you!
Once all inspections are completed, the buyers remove their contingencies. Afterwards, you may feel we are at a little bit of a lull and seems “very quiet”…this is actually a good thing. Everything is happening behind the scenes at this point, and we are checking in with Escrow and the other agent to ensure we have everything on track for our close date
*All of the buyer’s contingencies stay in place until the buyer removes them in writing. If there are issues with removing them on their contractual due date, they can request a extension from the seller. Buyers…..while your contingencies are in place, your EMD is protected
You have an entire army of people who have your back. Don’t hesitate to reach out to any one of us to ask questions. We look forward to celebrating the close of escrow with you!
Stage 4 – Final walk through
Now it’s time to finish and get your file to closing.
- Schedule the buyer’s final walk through of the home*
- Transfer Utilities and services from the seller to the buyer
This is our easiest of stages. If you are not able to do a final walkthrough, that’s OK, we can still check the home out for you on your behalf.
*The final walkthrough is not a condition for closing escrow, but only for the buyer to confirm that the home is basically in the same shape as when they submitted their offer and that any repairs agreed to are completed.
Stage 5 – Funding and Recording Escrow File
Yay, now this really getting exciting.
- Buyers will send their final funds to escrow, which escrow will provide the amount to the buyer
- Title will submit the file after funds are received to the County Recorder’s office to record title.
- Upon notification of Recordation from the County, escrow will close! Awesome sauce.
Hope you are all packed and ready to. It’s truly time to celebrate! A big Congrats are in order.