Preparing Your Buyer for Escrow In 6 Easy Steps
For most real estate professionals, handing the house keys to a proud buyer is one of the happiest parts of the job. But that much-anticipated close of escrow can follow 30 to 60 days or more of diligent planning and paperwork. So, as a follow-up to last month’s article, “4 Tips to Help Prepare Your Seller for Escrow,” we’ll focus now on preparing your buyer for the process leading up to this most rewarding moment.
The more your buyer knows about the escrow process, the smoother the transaction will be. As your escrow partner, we are glad to serve as a resource and clearing house in guiding your buyer through the process.
Here are six tips to help you prepare your buyer for a smooth escrow process:
1. Pre-qualify: If a home buyer will be obtaining a new loan, the savvy buyer’s agent will have ensured early on that the client has been pre-qualified, and will advise the client to carefully review the terms of the loan – interest rate, fees, prepayment penalties and other disclosures – before signing.
2. Signing Documents: Once the signed purchase agreement and down payment funds have been transmitted to the escrow company, you can assist your buyer in the timely review and signing of:
- Escrow Instructions – verify that names and information are legal and correct
- Confidential Statement of Information – verifies the buyer’s ID and history
- Buyer’s Information Sheet – verifies lender, title, and insurance information
- Estimated Closing Statement – listing anticipated escrow, title and other applicable fees as well as the amount of final down payment needed to close
3. Stay in Touch: As the escrow process proceeds, you will want to review the preliminary title report with your buyer and stay in touch with the lender and the escrow officer to be certain all requirements are being met, including:
- New loan information – Allows escrow to provide the lender with needed documentation
- Insurance information – Fire/casualty insurance as required by the lender
4. The Final Walk-through: Ideally, you will arrange a final walk-through for your buyer a few days before closing to check that everything in the home is in working order. You may want to ask the seller for a list of contractors and service companies who have worked on the home and/or currently provide gardening or other services, and present that to your buyer.
5. Closing Funds: As closing day approaches, the final closing statement will need to be reviewed, since the buyers need to have closing funds available and wired into escrow no later than 48 hours before closing.
6. Making it Official: While some states schedule a formal closing date to be attended by all concerned parties, closing in California is less ceremonial. Once any negotiated work has been completed, liens or judgments have been cleared, loan funds have been received, and all instructions have been met, escrow closes when the Grant Deed and other applicable documents are recorded with the County Recorder.
At that point, you can expect a call from your escrow officer confirming the recording of the documents. You can pick up the keys, present them to your buyer, and celebrate another successful close and another happy customer.
Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.
This material is not intended to be relied upon as a statement of the law, and is not to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice. The material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy.
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