What can sellers expect when they open escrow

What Sellers Can Expect When They Open Escrow

Introduction: Opening escrow marks an important milestone in the process of selling a property. It signifies that the buyer is serious about the transaction and has taken steps to secure their financial commitment. For sellers, understanding what to expect during the escrow period is crucial for a smooth and successful closing. In this article, we will explore what sellers can anticipate when they open escrow and provide insights to help navigate this stage of the selling process.

1. Receipt of the Purchase Agreement: Once the buyer and seller have agreed on the terms of the sale and signed the purchase agreement, the seller’s agent or escrow officer will provide the seller with a copy of the fully executed agreement.
2. Deposit of Earnest Money: The buyer will typically submit an earnest money deposit, which serves as a show of good faith and commitment to the transaction. The escrow officer will handle the deposit, ensuring it is properly deposited into an escrow account. Deposits should be made within the time period of the contract.
3. Escrow Instructions and Documents: The escrow officer will prepare the escrow instructions, which outline the conditions and requirements for the escrow period. The seller will receive these instructions along with other necessary documents, such as the preliminary title report and disclosure forms. The seller will also receive a N289 form from escrow.
4. Property Inspections: The buyer may schedule inspections of the property during the escrow period, which could include a general home inspection, termite inspection, or other specialized inspections. Sellers should be prepared to accommodate these inspections and provide necessary access to the property. Home inspections normally take 3 hours and the buyers walkthough the last 30 minutes.
5. Title Search and Clearances: The escrow officer will initiate a title search to identify any potential liens, encumbrances, or title issues that may affect the sale. If any issues arise, the escrow officer will work to resolve them or obtain appropriate clearances.
6. Buyer’s Loan Processing: If the buyer is obtaining financing, they will go through the loan application and approval process during the escrow period. The buyer’s lender will review the buyer’s financial documents, order an appraisal, and finalize the loan terms.
7. Negotiations and Contingencies: The buyer may request repairs, credits, or other concessions based on the inspection reports or other contingencies outlined in the purchase agreement. Sellers should be prepared to negotiate these requests and work towards mutually acceptable resolutions.
8. Closing Disclosure and Final Settlement: As the escrow period nears its end, the escrow officer will prepare the closing disclosure, which details the final financial terms of the transaction. The seller will review and sign this document, and the buyer will also receive a copy.
9. Final Walk-Through: Prior to closing, the buyer will typically conduct a final walk-through of the property to ensure it is in the agreed-upon condition and any negotiated repairs have been completed.
10. Closing and Disbursement of Funds: Once all conditions have been met, and both parties are ready to proceed, the escrow officer will schedule the closing. At the closing, the seller will sign the necessary documents to transfer ownership, and the funds from the buyer’s lender and any other sources will be disbursed. After closing, the escrow officer will record the necessary documents with the appropriate government entities to finalize the transfer of ownership.

Conclusion: Opening escrow is a significant step in the selling process, and sellers should be prepared for the activities and requirements that come with it. By understanding what to expect during the escrow period, sellers can effectively coordinate with their agent and escrow officer, address any contingencies, and ultimately achieve a successful and timely closing. Clear communication and cooperation among all parties involved will help ensure a smooth transaction from escrow opening to the final transfer of ownership.

Celester Thomas

Company Blog – Soldier to Soldier Hawaii Realty

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