You’ve opened escrow, now what?
Congratulations! You’ve just opened escrow on your new home. So now what happens?
Well, first off, let me tell you the next several weeks are going to be a little stressful. Don’t worry. We’ll get you through the process. We’ve done this hundreds of times. So let’s take you on this journey you’re about to embark on.
First thing’s first, you’re going to have to get your earnest money deposit (EMD) into the escrow company. What is that? It’s the money negotiated in the contract that is also known as the good faith deposit. This must be delivered to the escrow company in three business days. If we open escrow on a Friday, that means, you have until Tuesday to get the earnest money deposit into escrow. You may deliver these funds by personal check or you can ask the escrow officer to deliver you wire instructions.
Speaking of escrow… what is it? Escrow is a third party that manages all the money and executes the documents singed by both parties. They cannot execute any instructions from one party or another without consent from both parties. So no worries that the seller will do anything they aren’t suppose to.
Next we’ll get ready for inspections. Now the level and number of inspections we get will all depend on what type of property you are buying. Everyone at a very minimum should have a physical inspection done on their property. Now, we have referrals to inspectors you may use, if you wish. You also have the opportunity to use any inspector you like. Physical home inspections typically are around $300 for a condo and up to $500 for a single family detached home. You may pay extra for your inspector to crawl under the home to check out the foundation. Check with your inspector your choose before so you know how much you will pay. The other inspections we get are termite inspections and foundation inspections. Usually a foundation inspection is ordered when it is called out by the physical inspector. If you feel this is something you want anyway, we will help facilitate this process. Most foundation companies will come and do a foundation inspection for free. Termite inspections are typically done on single family detached homes that are made out of wood construction. We also order termite inspections for condos that are made out of wood construction. Condos over five stories tall are made out of concrete and therefore don’t typically require termite inspections. However, if you feel comfortable, then by all means, order one. Again, most termite companies will not charge you for an inspection.
Once we pull all the inspections together then we will start to negotiate any repairs that may be necessary on the home. First and foremost, we deal with health and safety issues. We take a deeper look into the inspections and see what if anything needs to be corrected prior to the close of escrow. Things causing fire hazards, foundation issues that need immediate attention may be requested for the seller to pay for and or credit the buyer. However, the request for repair is not an absolute. It’s a compromise. You will not get everything you want on your wish list for the repair request, so you should be prepared to know what you compromise. Once we determine what that is. We will let escrow know.
Now while we are going through the inspection process–which we have 17 days to do–the seller will send us any disclosures. They will be required to tell us anything they know to be true about the property. There are a multitude of questions ranging from repairs, to any possible water damage, were there pets on the property. We will know the answers to all these things–if we discover anything during our inspections then we will go over those with the seller. If the seller has owned the home for a long time–they sometimes forget to disclose something. Most of the time this is not on purpose–once their memory is jogged, they amend the disclosures. Just know that prior to you receiving your disclosures, we will have read everything and let you know before inspections of any red flags we may see.
After all the disclosures are signed and we have negotiated any repair requests then it’s a waiting game to the close. The lenders are going to be on the back end and they are going to be doing their thing. About a week prior to closing the lender is going to call the escrow company to put the closing disclosure together. This disclosure is going to be what they will use to draw the loan docs from and these figures don’t change. You will see the figures on your loan documents.
About 4 days, before closing the escrow company will be in receipt of your loan documents. Once these docs are in hand they will call you to schedule a signing. You will either sign your loan docs at the escrow company or you will sign them in your home or where ever you can meet your mobile notary. Don’t worry about arranging a notary–the escrow company will do that for you. The notary or escrow officer will hand deliver you wiring instructions and a copy of your loan documents for you to keep. They will also tell you exactly how much money you need to wire to complete the closing.
Once the docs are signed, the escrow officer will review them to make sure they are all in order and if they are–they will call the funder at the mortgage company and ask for closing funds from the lender. They will make sure all the numbers match and if they do–the funder will push the button to wire funds to the title company. Once the title company is in receipt of all the funds–the escrow officer will set your file to record at the county recorder office.
Once the county rubber stamps the deed–the house is yours. That’s when your escrow is closed.
Questions? Call me at 619-818-2992 I look forward to helping you.
Chris Spade Keller Williams San Diego Metro
CA BRE #01785713 CA BRE #01295699