Opening the Escrow With First American Title
To open escrow, be prepared with the following information:
Proper spelling of buyers’ and sellers’
Property address and parcel number, if available
Names, companies and phone numbers for other agents,
parties to the transaction
Terms of the sale (especially close of escrow date)
Marital status of the principals
Existing loan information (helps with First American’s
title search and in ordering payoffs), especially loan number and lender’s address
New lender, contact person and phone number
Social Security Numbers
First American Title’s escrow officer will order a preliminary report from the title department.
Each title company has a “title plant” where the public records can be searched and a written report is issued
of their findings. When you receive the report, review it to verify that the information the seller has given you matches
the information of the report. Check the vesting to ensure all the proper parties have executed your contract. Verify that
all the loans are reflected properly and check the map to verify the property description.
The Statement of Information
When title is searched, all names of parties involved are run on the “general index.” The general
index is an index of recorded liens against individuals and not specific to a certain property. They attach to properties
which are owned by the people that they are against, hence a concern to title insurers. Because of common names, and to verify
marital status, the escrow officer often orders a statement of information or “S.I.” This is used to eliminate
liens that are not against our party. The recorded liens contain identifying information like a social security number or
a phone number for an attorney who can be contacted to obtain identifying information.
If the escrow officer sends
a request for an S.I. to you for your client to complete, have your client do so as soon as possible and return to the escrow
officer for processing to avoid last-minute lien problems. The information is strictly confidential.
Inspections and Invoices
When you are ordering any of the following, ask the company to send a copy of the report and billing to First
American Title if report fees or work are to be paid through escrow:
disclosure reports/geological inspection
The best way to avoid last-minute problems on your escrow is to be aware of what is considered an unusual circumstance
and then to advise the escrow officer or loan agent up front. Some examples are:
Preparing your home for market does
not stop at the outside. Preparing your home inside is just as important. Just as you cleaned up the outside, the inside should
be just as clean. Put away any items that would contribute to a cluttered appearance. While family pictures and other treasures
have meaning to you, to a potential buyer they are just things which tend to make a room seem smaller. Make sure that the
lights are on and the window coverings are open when a buyer comes into your home. Light and cheerful is much better than
dark and cheerless when it comes to showing your home. Sort out closets and arrange things neatly. It will make your closets
look bigger, and further contribute to the sense of tidiness. Pride in your home will be seen by a potential buyer, and hopefully
make them want to buy your home.
Note: If your clients are new to the escrow process
(e.g. first-time homebuyers or sellers, non-English speaking) or haven’t bought or sold a home for many years, it may
be helpful for them to review in advance some of the “standard” documents they will be required to sign later
(for example, escrow instructions, grant deed, etc.)
by sellers, or buyers moving in before close and paying rent through escrow
or credits in escrow
out-of-town during crucial times (like the sign-off). Discuss options with the
escrow office, like the possibility of papers being sent out for signature or arrange for the party to give Power of Attorney
to someone. (Remember that Power of Attorney forms must be approved by First
American Title, and the escrow officer will need instructions from the principals to use the Power of Attorney.)
sales, bankruptcy, divorce cases
speaking clients (arrange for an interpreter in advance)
conveying title or acquiring title as partnerships, corporations or under trust agreements.
men or women taking title as their sole and separate property.
A good escrow officer communicates often with his or her clients, but a good escrow officer also has a lot of
clients. To help your escrow officer help you, keep him/her advised of what is happening in your transaction, via either the
phone, or written notes and messages. Advise your escrow officer if terms of the sale have changed. Let the escrow officer
know when to expect loan documents. If your manager requires a certain form for the commission demand or other special documents
for your office escrow file, the escrow officer will need to be informed.
Advise your buyers that deposits are not
normally placed in interest-bearing accounts. However, if the client has a large deposit or a long escrow period, you or your
client may want First American Title to open an interest-bearing savings account for the buyers’ deposit. If so, call
the escrow officer to get the proper forms completed for opening a savings account. Verify the title company’s charges
for opening a savings account.
Advise your buyers that they will be asked how they wish to hold title. First American
Title can provide them a flyer entitle “Ways of Holding Title.” However, the escrow officer, like you, is unable
to advise them on this. If after reviewing the flyer they are unsure, have them consult with an attorney or CPA.
your buyers of good funds requirements. If you are unsure, put your client in touch with the escrow officer.
the buyers talk to a hazard insurance agent early along the way. Tell the buyer to give the escrow information (escrow number,
escrow officer’s name, phone number etc.) to the insurance agent. Please also give the name and phone number of the
insurance agent to the escrow officer.
Issues to Consider
As the close of escrow date draws near, the flurry of activity and the number of people who play key roles in
getting the transaction closed on time increase.
Hopefully, at least a week before closing, loan papers will arrive
at First American Title (usually, the lender calls the title company, who must then arrange for delivery of documents to First
American Title). The escrow officer needs some preparation time to draw his/her papers and compile all documents for the sign-off.
The lender usually has a 24 to 72 hour “funding time.” The fire insurance agent needs some time to prepare and
evidence of insurance, and a courier must be arranged for delivery.
Since your client has come to rely on you to follow
up on all of these details, any errors or problems become reflections on you. To avoid any problems, be aware of all the timing
and work with your escrow officer to expedite the transaction. Consider overnight mail and special messengers if time is short.
Often the price of these is insignificant compared to the headache any delays could cause. If problems develop, work constructively
with those who can solve them.
Arrange a mutually convenient time for signing of escrow papers between you, the escrow officer and the principals.
Try to arrange for the earliest possible time. If you want the escrow officer to call your principals to schedule the sign-off,
let him/her know in advance.
To help you and your clients prepare for the sign-off, keep in mind:
is a good time to solidify your relationship with your clients and escrow officer. Try to be present for the sign-off, as
this can be a stressful time for your clients. Your soothing presence and attention to detail can help them ease their stress.
Let your escrow officer know what you expect at the sign-off, so that he/she can adjust his/her “technique.” For
example, you may wish to review everything with your clients first or you may with her to go through everything in detail,
as your may have nervous first-time buyers. If you sellers are getting divorced, you may want to schedule separate times and
inform the escrow officer that people may be emotional or overly stressed. Communication will help you look good with your
clients and will help the escrow officer to make you look good with your clients too.
normally takes about 30 minutes for sellers to sign and 60 minutes for buyers.
possible, review the instruction page and estimated closing statement before signing.
Have your clients arrange for a sitter, if possible, (title companies are usually boring places for small children).
I.D. will be required for notarization of grant deeds and deeds of trust. A valid
driver’s license, with picture or I.D. card or U.S. Passport are best for this.
Call the escrow officer early to discuss alternatives if the client doesn’t have one of these.
funds requirements and California law.
will be asked how they wish to hold title (refer to “Ways of Holding Title”).
will be asked how proceeds are to be disbursed.
will be the time to verify that all funding conditions have been met; check with the loan agent to be sure.
Requesting Loan Funds
After the buyers and sellers have signed, the escrow officer will request funds from the new lender. The escrow
officer does so by filling our First American Title’s “Request for Funds” form and making copies of all
documents the lender wishes to review before funding (including copies of the buyers’ and sellers’ instructions).
The escrow officer will have the package delivered by messenger if the lender is local or make arrangements for overnight
nail if not. Stay in touch with the escrow officer to verify that the lender’s time requirements coincide with your
Familiarize yourself with California’s good funds law. Both the buyer and lender need to deposit to escrow,
usually the day before scheduled recording, good funds are prescribed by law. Cashiers or teller’s checks and wires
are the best way to ensure that funds won’t delay the closing. If you are aware that your client cannot obtain one of
these, discuss as early as possible with the escrow officer. Be aware that some mortgage companies’ checks are not considered
cashier o teller’s checks. Find out early and involve your escrow officer in dealing with funding problems.
After funds are ordered, the escrow officer submits to First American Title’s title plant the documents
for recording a request to issue title insurance. The documents are reviewed by the title officer and the property and “general
index” are “run-to-date.” In other words, the records are checked once again from the date of the preliminary
report right up to the date of closing for any documents, which may affect your escrow.
If nothing unusual is fond
in this “date-down” and funds are received, the recording clerk for the title company will record the documents
on the morning of close of escrow. Upon completion of recordation of all documents by First American Title that morning, the
clerk will call the escrow officer with “confirmation” of recording. At this point, the escrow officer is ready
to disburse funds. He/she will call you to inform you of this, and at this point you can send your sellers in to pick up their
check, deliver keys to buyer and discuss delivery of or pick up of your commission check. Let your escrow officer know if
your bookkeeping department has a deadline for delivery of commission checks. If special arrangements need to be made for
the sellers to get their check, let the escrow officer know in advance.
At close of escrow, copies of closing statements
and pertinent documents are mailed or delivered to the parties involved.
Post Closing Procedures
Hopefully you won’t have to deal with this too often, but occasionally if funds are held for work or rent,
there will be a need for continued communication on your escrow. Your escrow officer calendars “funds held files”
to follow up after the allotted time frame for holding funds. Your can impress your clients by doing the same and following
up on the completion of any work on the property after close of escrow and disbursement of funds held in escrow. Stay in close
communication with the escrow officer and your clients to tie up all the loose ends.
Now that your have completed
what hopefully has been a smooth escrow process or are about to work diligently on opening an escrow, we at First American
Title hope you will choose us to be your providers of title and escrow services. We offer the full range of our resources
to help you and your clients achieve successful closed escrows. Thank you in advance for your support.
Compliments of First American Title
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