Opening Title and Escrow
- Jan. 5, 2018
- Susan Malcolm
- Real Estate Tips
Opening escrow is actually quite simple. It involves going to the escrow or title company and handing over a deposit. This deposit, or earnest money, is the good faith check that is given by the buyer at the time the purchase agreement is signed. Anyone involved in the transaction is able to open escrow-buyer, seller, real estate agent or lender; however if the buyer is represented by a real estate agent, they will usually open escrow because they will be holding the good faith check from the buyer. Once escrow is opened, it will be assigned a number and an escrow officer to assist you.
In addition to handling the earnest money, the escrow officer's job is to ensure that all conditions are met before escrow closes. Whoever opens escrow will need to give the escrow officer instructions about the transaction, and explain what conditions need to be met before any money can change hands. These instructions may include what is expected of both the seller and the buyer. For instance, the purchase agreement may state that the seller must pay for major repairs before the transaction is complete.
Simultaneously, the title officer will be preparing to change ownership of the home, investigating any liens against the property as well as arranging the title insurance policy.
The length of escrow depends on the mortgage lender's timeline, in other words, it's contingent on how quickly the lender can fund the buyer's loan. So although the buyer and seller may have agreed on a closing date, it may end up changing. The lender and the escrow officer will organize the disbursement of funds, the closing date, and the distribution of the money from the sale. The closing process varies from state to state and can even vary within a state, due to differing requirements.