California is but one of many states that require the use of escrow services as essentially the final stage in most real estate transactions. Though no transaction is complete without escrow, many individuals do not have a clear idea as to what is involved in the escrow process.
We at Prominent Escrow do our best to help our clients clearly understand this process, and do so in a timely professional manner.
The escrow process begins, or opens, when the seller and buyer have signed a real estate sales purchase agreement that normally includes any receipt of deposit. This document with the deposit and any additional instructions serves as a guideline for the escrow officer or provider.
There are four principals involved in a real estate transaction: the buyer, seller, lender and borrower. Whatever your role, Prominent Escrow will fulfill its obligation as an escrow provider to assure you that no funds or property will be transferred until all instructions in the transaction have been fulfilled.
It is the responsibility of the escrow provider to safeguard all funds and documents, and not to disperse any funds of convey any title until all instructions and legal provisions have been met.
When escrow opens a number will be assigned to the escrow account. At this time the escrow provider, Prominent Escrow, will collect all contracts, documents, instructions, deposits or additional funds. For the sake of a timely, professional and legal escrow process any, and all, principals need to be responsive to any additional requests from the escrow provider.
The buyer should purchase title insurance in order to protect them from any “blemishes” on the title. A preliminary title search is ordered to be sure there are no claims against the title.
The title report will summarize the condition of the title that will include any liens easements, encumbrances or claims against the property. The seller will normally be responsible for resolving any claim against the property.
The contract or escrow instructions may contain “contingencies.” These may include the purchase of home and/or flood insurance, any home inspection, additional financing, any repairs to be made or any other tasks or instructions. All of these must be completed and “signed off” before escrow is finalized. All parties will receive a signed copy of the completion of each contingency.
When all contingencies are met, the loan is funded and all final escrow instructions are complete the final disbursement sheet will be also be completed. Final title can now be transferred and escrow closed and the deal is sealed when the escrow office records a new deed in the buyer’s name.