The Escrow Process
The California Escrow Process
- Deliver Deposit Check or Wire Transfer. Sign your Purchase Agreement, and deliver your initial deposit (usually 3% of the purchase price) to escrow.
- Prepare Escrow Instructions. The escrow instructions are a set of papers outlining all the terms of the agreement that the principals (buyer and seller) have agreed to. It also lists the financial obligations and the amount of the initial deposit.
- Order Title Search. A title search is performed on the subject property, resulting in a “Preliminary Report” from a title company. The title company was determined by the Buyer and Seller in the purchase agreement. The escrow holder examines this report for items not negotiated in the purchase agreement. For example, is there a lien (or additional loan) on the property that wasn’t reported? The seller must clear any such item or it must be brought to the attention of the buyer.
- Request Demands and/or Beneficiary Statements. This request for information goes to any lenders of record.
- Accept Structural Pest Control Report and Other Reports or Inspections. These reports might include plumbing or roofing reports. They all pertain to the property’s condition, and are kept in escrow.
- Accept New Loan Instructions and Documents. This happens if the buyer is obtaining new financing for the home. The escrow holder also obtains the buyer’s approval/execution of the documents. The escrow agent must also satisfy all lender’s instructions before using the lender’s funds to complete the transaction.
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Accept Fire Insurance Policies and Complete Settlement. It is necessary for the Buyer to obtain their own fire insurance policy on the subject property prior to the close of escrow, and deliver a copy of that policy to escrow.
Escrow also makes any required payments for property taxes, which are prorated to the date of the close of escrow. In most cases, the Buyer will also receive a supplemental property tax bill which reflects the difference between the Seller’s assessed value and the new purchase price. - Request Closing Funds. The escrow holder cannot disburse any funds until all items, such as checks or drafts, have cleared and become available for withdrawal.
- Audit File in Preparation for Closing. The escrow holder makes sure all required documents have been received and signed, and distributes the closing funds to the parties due money. This could include the Seller, the Seller’s mortgage company, the real estate agents’ commissions, and payment for any inspections or reports performed during escrow.
- Order Recording. At this point, the escrow holder orders that title be recorded at the county clerk’s office in the new owner’s name. This can happen at any point in the day, but usually occurs by 5pm. You cannot take possession of your new home until this has been completed, for liability reasons.
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“Lori was the consumate professional. She was attentive to our needs and knew exactly what we wanted. She even stayed with us through escrow to ensure that everything went smoothly for our first transaction. Thanks Lori!!!”
A. Jones.
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“I can’t thank you enough for the amazing job you did with the purchase of our new home. We were so impressed with your level of expertise and skill while negotiating a relatively complicated deal. I have been buying and selling real estate for ten years and never have I worked with a Realtor who possesses such knowledge, much less one who is so good with nurturing client relationships.
Thank you so much for the professional and friendly way that you handle every situation. Even through times that were stressful for us, you navigated through with a smile on your face and kind words of support. We have, and will continue to recommend you as an outstanding Realtor in our community.”
Jennifer Farrell, Jennifer Farrell Designs
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“Buying a home can be an overwhelming experience, but Lori was always there to make everything seem easy. We love our new home, and we’ll never forget Lori for finding it for us.”
Jordan and Jodi Zevon
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“I wanted to send you a quick note to let you know how thrilled I was to have you represent me in the sale of my home in Hollywood Hills. From start to finish you were professional, committed and understanding. It is a particularly stressful procedure, and you made the whole experience pleasant and stress-free. I thank you and will refer you to any Buyer that I meet.”
B. Alexander
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“For anyone looking to sell Real Estate with Lori, I guarantee you will be impressed! Lori is very knowledgable in her field and works diligently for her clients. She is a no nonsense gal with a winning personality. I give her my highest recommendation.”
Kim Krones, Reliant Realty
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“Lori is quite simply the best of the best. In 2006, we could see the market softening. She had so many ideas to make sure we could sell and sell at the price we were trying to get. Much of her approach is to get the home to raise zero objections with a buyer. Her dedication and experience paid off for us. We sold when we wanted and at the price we wanted. I would give her my highest recommendation. If you have the chance to work with her, take it!”
Jake Ryan
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“I’ve worked with Lori Frankfort on multiple real estate transactions over the past few years and she is extremely professional and hard working. I look forward to a continuous business relationship with Lori in the future.”
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