.png/:/rs=h:320,cg:true,m/qt=q:95)
Pre-Escrow
- Once an offer to buy the property has been accepted by the seller and a purchase agreement contract has been signed, escrow begins.
- Seller: ($$ Seller) If you have an HOA, escrow requires that you pre-pay your Home Owner’s Assn. for CC&Rs and HOA documents – it cannot be paid through escrow.
Day 1: Open Escrow and Order Title
- Seller: The seller’s agent or transaction coordinator will open escrow and order a title policy: Your agents and/or escrow officer will select a date to close based on when the buyer’s loan will fund. The buyer will designate an escrow period on their purchase contract
- Seller: you will most likely be asked to pay for a one-year home warranty plan that covers basic repairs. This is paid through escrow.
Day 3: Earnest Money Deposit and Escrow Instructions
Buyer: ($$ Buyer) Before you go any further, escrow has to be funded. That means a fraction of the down payment (referred to as Earnest Money Deposit, or EMD) is deposited into the escrow account by the buyer. This ensures the buyers put some skin in the game, demonstrating their seriousness about the purchase.
Day 3-7: Escrow Instructions
Seller and Buyer: Escrow will send the buyer and the seller your specific escrow instructions. Typically, the package will include the seller’s grant deed to notarize ($$ Seller), escrow instructions to sign, commission instructions, tax forms, Statement of Information, and payout documentation. It’s imperative to get these documents back to escrow in a timely manner in order for escrow, title, and the lender to process.
Day 3-5: Cooperate with Home Inspection
- Buyer: ($$ Buyer) Order a home inspection as part of your due diligence. paid upfront and the price is based on square footage and other factors.
- Seller: The inspector will note the absence of smoke and CO detectors and the water heater must be double strapped (Potential $$ Seller)
- If the property is vacant, be sure that water, gas and electric are turned on for the inspector.
- Be sure to leave all keys, fobs and remotes and that all rooms, crawlspaces, attic and outbuildings are accessible
- Following inspections, the Buyer may submit a Request for Repairs, which will either ask the seller to repair an issue or give a credit based on the findings of their inspection.
Day 7-10 Negotiate Request for Repair
($$ Seller- be prepared, you may be required to pay for repairs when completed)
- Ordinarily, sellers do not need to accept all of the buyer’s requests for repair; however, buyers can refuse to remove the inspection contingency if matters of functionality or safety are an issue.
- Sellers are entitled to a copy of the home inspection report if the buyers request repairs.
- If the seller does not choose to make repairs, a buyer may request a closing cost credit.
Day 7-10: Obtain Seller-Required Inspections
($$ Seller) termite inspections and repairs can be paid through escrow, however, be prepared to pay for home repairs when completed
- Seller: If your contract calls for termite certification, hire a reputable company to conduct the inspection. Termite is usually paid through escrow.
Day 3-17: Disclosures
- Seller: The buyer receives a list of disclosures about the house or property as mandated by state law. Disclosures provide information on known problems or defects for that area or age of house, such as a leaky pipe or any remodeling. Disclosures benefit the buyers because they know what faults the property has. Disclosures benefit the sellers because they believe the known faults were built into the agreed-upon price by the buyer; therefore, the seller won’t be as willing to go down in price during negotiations. If the seller is aware of material facts, disclose them. Buyers – Review these documents carefully with your agent!
- The buyers will perform their due diligence and investigations on the property. The home must be available for the buyer during this time period. The seller must also keep all the utilities on through the close of escrow.
Day 7-20: Seller: Prepare for the Appraisal Appointment
- Clean the house the day before the appraiser arrives.
- If you receive a low appraisal, ask your agent about alternatives.
- You are not entitled to receive a copy of the appraisal because you did not pay for it.
- You will need to ensure that smoke detectors and CO detectors are placed in the required areas and the water heater must be double strapped
Day 7-20: Sign Title and Escrow Documents
You will sign escrow documents shortly after opening escrow. Sellers will also be required to have notarized signatures as required by escrow (such as a grant deed)
Day 17+ Buyer to Remove Contingencies
In California contracts default to 17 days, at which time, the buyer must remove contingencies. Contingency removal is not automatic. The contingency removal form must be signed by the buyer. Removing all contingencies releases the buyer’s initial deposit to the seller, should the buyer cancel escrow and it is the buyer’s fault. The buyer may remove contingencies one at a time or agree to remove all contingencies.
Here’s a list of standard contingencies and their associated timeframes:
- Loan (21 Days)
- Appraisal (17 Days)
- Buyer’s investigation, including insurability (17 Days)
- Condo Disclosures and CC&Rs (17 Days)
- Reports/Disclosures including seller disclosures, a physical inspection report and pest report (17 Days)
- Title report (17 Days)
- Sale of Buyer Property (Varies)
If buyers do not provide a timely release, sellers have the right to demand the buyer performs and then may cancel the contract if they do no comply.
ALEJANDRO CEJAS REALTOR® DRE#02105644
21010 E Pacific Coast Hwy Suite C250
Copyright © 2024 - All Rights Reserved. LUXRE REALTY, INC
