Steps, Procedure, Requirements and Timeline
The escrow process occurs between the time a seller accepts an offer to purchase a property and the buyer takes possession of the home.
The first part of the escrow process is to find an escrow such as an attorney, execute contracts on the scope of work and open an escrow account in which the deposit for the buyer intended to be made to the seller is to be held.
The buyer will get inspections completed, purchase insurance and perform a final walk through before closing the deal.
The buyer may walk away from the Agreement if conditions are not met or there is a problem with the property.
- Open an Escrow Account
A Property Escrow Account is managed by a third party company in order to hold property payments, deeds and other documents related thereto. Usually the Escrow agent will be a neutral Third Party. Where an Attorney is handling this Process, it is usually referred to as “Settlement”.
Once the buyer and the seller agrees on a price and signs a mutually acceptable Purchase Agreement, the seller or its agent will take a deposit depending on the agreement. The Deposit will be applied to the down payment which should be deposited in an escrow account at the Escrow Company or service specified in the purchase agreement.
- Title, Home, pest, environmental Inspection and fulfillment of Purchase Agreement conditions
The Title Deed of the property must be inspected at the Land Department to ensure that the seller has the right to sell the property without any encumbrance. Likewise, depending on what was executed in the Purchase Agreement, the Buyer should get a professional home inspector to inspect the house and give a detailed report on any dangerous or costly defects in the home. At this point should there be any concern about the house, the buyer and either back out, ask the seller to fix them or to lower the price so as to carry out the repairs yourself.
All other inspection and conditions in the Purchase Agreement will be fulfilled at this point.
Insurance should be taken out and fulfilled according to the Terms of the Agreement. Usually the buyer decides which insurance company to choose and what insurance cover to take.
- Final Inspection
Just before closing off the deal, the buyer should inspect the house a final time. This is to ensure that no new damages occurred.
- Close Escrow
As soon as the buyer is satisfied with all the terms, and result of physical inspection, the Deed of transfer/ Deed of Assignment can be executed and the money from the escrow account delivered to the Seller. At this point, the Escrow’s responsibility is finished.
The time line of the escrow service is dependent on the fulfillment of the process required in fully transferring the property from the seller to the buyer.
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