Certified Foreclosure Specialist

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ESCROW

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Opening an Escrow

To open escrow, be prepared with the following information:

  • Proper spelling of buyers’ and sellers’ names
  • 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
The Preliminary Report

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:

  • Termite inspection
  • Roof inspection
  • Pool/Spa inspection
  • Home inspection
  • Home warranty application
  • Property disclosure reports/geological inspection
  • Any other inspections
Unusual Circumstances

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.

  • Rentback by sellers, or buyers moving in before close and paying rent through escrow
  • Holdbacks or credits in escrow
  • Parties 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.)
  • Estate sales, bankruptcy, divorce cases
  • Non-English speaking clients (arrange for an interpreter in advance)
  • Parties conveying title or acquiring title as partnerships, corporations or under trust agreements.
  • Married men or women taking title as their sole and separate property.
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.)

Communication

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. A Title Company can provide them a flyer describing the different Ways of Holding Title. However, the escrow officer, is unable to advise on this. If after reviewing the flyer they are unsure, consult with an attorney or CPA to decide how to take Title.

Have the buyers talk to a fire hazard insurance agent early along the way. Tell the buyer to give the escrow information (escrow number, escrow officers name, phone number etc.) to the insurance agent. Please also give the name and phone number of the chosen 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 to the Escrow officer at her Title Co. (usually, the lender calls the title company, who must then arrange for delivery of documents to). 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 the evidence of insurance, and a courier may be arranged for delivery.

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.

The Sign-Off

Arrange a mutually convenient time for signing of escrow papers between the escrow officer and the principals. Try to arrange for the earliest possible time.

Keep in mind:

  • It normally takes about 30 minutes for sellers to sign and 60 minutes for buyers to sign.
  • If possible, review the instruction page and estimated closing statement before signing. 
  • Proper 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 does not have one of these.
  • Good funds requirements and California law.
  • Buyers will be asked how they wish to hold title (refer to “Ways of Holding Title”).
  • Sellers will be asked how proceeds are to be disbursed.
  • This will be the time to verify that all funding conditions have been met; check with the loan agent if not 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 a 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 mail if not.

Good Funds Law of CA

Both the buyer and lender need to deposit to escrow, usually the day before scheduled recording, good funds as prescribed by law. Cashiers or tellers checks and wires are the best way to ensure that funds will not 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 many Mortgage Company checks are not considered cashier or tellers checks. Find out early and involve your escrow officer in dealing with funding problems.

Closing Procedures

After funds are ordered, the escrow officer submits to the 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 notify party of this, and at this point sellers can pick up their check and Realtor delivers keys to buyers. At close of escrow, copies of closing statements and pertinent documents are mailed or delivered to the parties involved.

Post Closing Procedures

Hopefully you will not have to deal with this, but occasionally if funds are held for work to be done or rent to be paid, there will be a need for continued communication on your escrow account. Your escrow officer calendars funds held files to follow up after the allotted time frame for holding funds.

Now that your have completed what hopefully has been a smooth escrow process or are about to work diligently on opening an escrow,                            
Compliments of Ginger Hopp
 
Call ... GINGER HOPP &  start packing !

 
Hopp for Action ... ... then, start packing !
                     Expect Extroadinary Service!
 
                     Your ' NEXT'  Realtor ®                                                                                    TESTIMONIALS
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GINGER  HOPP     BROKER CFS #01240587          Realtor Since 1998

EAGLE EYES REAL ESTATE 

Specialty Counties:
Placer County CA, Nevada County CA, Sacramento County CA, Marin County CA, Sonoma County CA, Napa County CA, San Francisco Greater Bay Area

  (707) 790-0022
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  Ginget@Hotmail.com  "Certified Foreclosure Specialist"  
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