Some of the most common documents required in a real estate escrow transaction include:
– Copy of the Offer
– Sellers Disclosure Packet
– Termite Certificate
– HOA Documents and Transfer Fees
– Contingency Removal Form
– FIRPTA Affidavit
– Prequalification Letter
– Proof of Funds
– Commission Instructions
– Wire Transfer Instructions
-Documents for Deed Transfer
Having all of your documented ducks in a row is one of the biggest parts of a successful escrow transaction. The documentation you’ll need to produce for your escrow agent will depend on whether you are the buyer or the seller. It’s always a good idea to confirm any and all paperwork that needs to be gathered with your real estate agent. Questions about documents or opening escrow? CLICK HERE to contact us!
Closing is the final phase of mortgage loan processing where the property title passes from the seller to the buyer. Your escrow agent will help make this process painless for you! CLICK HERE to speak with one of our escrow professionals who can answer any questions you might have.
For a home sold at $450,000, the escrow fee for the seller would be $1,020
Make sure to watch out for additional fees that might get added onto the estimate, including wire fees, overnight shipping fees, storage fees, or courier fees.
Curious what other fees sellers need to think about when buying a home? Check out a full breakdown of the costs associated with selling a home in California. We know this can be tricky, so CLICK HERE to speak with someone who can help you with your escrow fees questions.
Homeowners have numerous opportunities to back out of purchase agreements. The deadlines that we outlined in the escrow process timeline can be negotiated by both the buyer and seller, and at almost every deadline, there is an opportunity that the potential home buyer can back out of their purchase agreement and still receive their earnest money.
Commonly disputed dates include the inspection contingency deadlines, title review deadlines, and loan contingency deadlines.
If you are unsure about your contingency deadlines, call your agent and ask them to walk you through the home closing timeline.
For inspection contingency, this is the date by which all of the home inspections must have been completed. If the buyer discovers something unsatisfactory about the property during this time that is a non-negotiable for them, they can drop out and receive their earnest money, and the house goes back on the market.
However, if the buyer discovers something he/she didn’t like after the agreed upon deadline, the seller often has the choice to refund the earnest money or not.
On the other hand, if the title review deadline draws near and the home is not proven to legally belong to the self-proclaimed owner, the buyer can reclaim their good faith money.
This is often the last deadline set up by the buyer and seller because it usually takes the longest to secure a loan. It also happens to be where earnest money becomes non-refundable, because the seller has been relying on your “good faith” up until the loan approval. This is often where the legal line is drawn and sellers can decide to legally withhold the money.
If there is a case where the good faith money enters into dispute, most likely if the seller doesn’t indicate to the buyer in a timely manner their intent to not follow through with the sale, the escrow company will safely hold on to the disputed money until the parties have reached a resolution. This is to protect the parties from any liability.
If the parties can’t play nice, they might end up in small claims court or general jurisdiction, depending on the size of the good faith money deposit and the laws of the state they reside.
One tip that will help you breeze through the escrow process is to introduce the lender and the escrow company right away.
After the TRID laws (a.k.a. The Know Before You Owe Act), which were originally enacted to protect borrowers from rip-off lenders, were updated in 2017, they introduced a new series of timelines and guidelines on fee disclosure.
Simply put: The lender and escrow agents now rely heavily on each other for the safe, accurate, and timely disclosure of all fees.
The sooner you introduce the two parties representing you, the quicker your escrow process will move along! Questions? Call us and let us help!
Don’t let the sheer number of documents tempt you to skim. Be sure that you read all of the fine print or have your escrow/real estate agent explain to you what you are accepting. You should fully understand the implications of all the documents involved before agreeing to move forward.
Remember: Honest clerical errors can happen. We address a whole range of escrow “what-ifs” below.
Termites aren’t an automatic disqualifying factor when it comes to the purchase of a property.. When the termite damage or infestation is uncovered during inspection, the seller will need to schedule the necessary treatments and repairs.
However, if the seller refuses to have the problem resolved, then the seller has every right to walk away from the deal. Escrow will be there to prevent the seller from losing out on the money already invested.
It’s also important to note that uncovering issues such as termites opens the floor to negotiation. This will also give the buyer a chance to come back with a counter offer.
This may come as a surprise, but water entering the foundation of homes is very common. According to Water Damage Defense, 14,000 Americans experience water damage each day.
While some sellers may not have been aware of the water damage and thus enable to disclose it in the first place, there are other sellers who try to sweep water damage under the rug. A fresh coat of paint and a strategically placed couch may keep their secret for a little while.
But now that you’ve uncovered this evasion, what are you next steps as a buyer? If the discovery happens before the sale is completed, then you have a few options.
The first option, Sellers can complete repairs, to the satisfaction of the Buyer by the close of escrow.
Second option, money or credit from Seller to Buyer, in lieu of water repairs, through Escrow.
Every state is different when it comes to a home that has been stigmatized by a death. Many states don’t require that buyers disclose that there has been a death on the property. California, however, is not one of those states.
In California, expect to have any deaths, no matter the circumstance, disclosed to you as the seller. This is only required for deaths having occurred in the three years prior to the offer date. The only exception to this law is in the case of a death caused by AIDS (as this is classified as a disability and disclosure of this death could be deemed discriminatory).
If you find out that the seller has failed to inform you of a death that occurred in the three years prior to the date from which you made an offer on the home, you have slightly different options depending upon your place in the process.
If you have yet to finalize the sale, then according to California civil code 1710.2, you should be able to walk away from the deal unscathed due to a failure to disclosure said information.
However is you’ve already settled in when you uncover the news, you are within your rights to file a lawsuit against the Seller.
You find out that your 3 bed/2 bath is actually a 2 bed/2 bath. At least that’s what the lack of permits would lead you to believe. Unfortunately, now your ‘bonus’ room comes with a bonus headache.
Now that you’re stuck with an addition made without a permit, you need to decide on your best move.
As a buyer, you can accept the deal and buy the home, risks and all. You can obtain permits and pay the necessary fees down the road.
Another option is to walk. You can then search out a different home without the headache of an illegal addition.
Finally, you can ask the seller to fix the issue before you close escrow. This may work in your favor, but if the seller is selling as-is they may not want to sink any money into correcting the non permitted work.
Each situation is a bit different. It’s best to consult with your real estate agent before moving forward.
Mold is no small thing. In California, for example, sellers must give written disclosure of all material facts that may sway the decision or willingness of a buyer to purchase the home at a specific rate. To skirt around this requirement could result in serious legal repercussions.
Since you haven’t bought the house quite yet, you should be safe from during it out in the courtroom. If you are still certain you want to buy the home, then at the point of finding the mold you can present the problem to the seller with the understanding that it will be solved before closing continues. Need more info about disclosures? CLICK HERE and let us help.
Imagine a hopeful home buyer discovers termites in their dream home. What does this mean?
While it depends on the severity of the situation, termites could be grounds for terminating a home deal.
If the buyer is lucky, the seller will set up the necessary treatments and clear the property of termites so the buyer doesn’t have to resort back to house shopping.
Because of the seller’s willingness to cooperate, home buyers can continue on to the next stop in the home closing process– obtaining the appraisal. Keep in mind, if things do not play out and the seller is not cooperative,, then the home buyer would have been able to walk away from the deal and recuperate their money. Need more info on home inspections? CLICK HERE for help.
If you didn’t already expect an impressive stack of documents, this is the point where we break the bad news to you. The final signing will consist of quite a few signatures.
The major players to watch for when it comes to documents are:
Initial Escrow Disclosure: This disclosure breaks down the distribution of money out of the escrow account itself. It shows in detail what all funds will be attributed to.
Deed of Trust: If you don’t pay for your home, your home goes away. That’s essentially what this document states. This contract allows the lender or bank to foreclose on your property if you don’t meet the agreed upon terms of the mortgage.
Promissory Note: This acknowledges your commitment to pay your loan for the home mortgage. It will provide in-depth details of interest rate and month payment requirements.
Other paperwork to watch out for can include but is not limited to:
– An occupancy statement
– Seller concessions
– Appraisal acknowledgement
– & Truth-in-lending disclosure.
If you have any questions about legal jargon or about the terms described above, do not hesitate to reach out to an agent at New Venture Escrow before diving into the home buying process. It’s also important to fully understand the costs of a slow escrow, so before we move on, CLICK HERE for more info on what choosing the wrong escrow company can cost you.
Real estate agents often offer E&O Insurance to their clients as a way to keep sellers safe during real estate transactions. However, the reality is that both sellers and real estate agents can benefit from E&O insurance.
If a dissatisfied buyer or client goes after either the seller or the agent with a lawsuit, the insurance will pay the settlement and judgment fees.
In the case of a lawsuit because of mold, as mentioned above, E&O would be there to help. Other situations sellers might find themselves in that E&O would cover include:
– Client claims you’ve lied
– Client claims you’ve withheld truth or acted criminally
– Client claims that you were not acting in their best interest
Although this shouldn’t come as a surprise, E&O policies will not cover fraudulent or malicious criminal actions.
Wondering if New Venture is the escrow company for you? New Venture offers the most competitive escrow experience in California with completely paperless e-sign features with our VentureTrac app, a 6-month E&O Policy, and unbeatable customer service. Last but not least, New Venture Escrow places the safety and security of your transaction as priority number one. Real estate wire fraud has become a billion dollar problem in our time, and we are taking the proper measures to prevent and eliminate fraud for the benefit of our clients. CLICK HERE to learn more about how to prevent real estate wire fraud and stay safe!
And don’t just take our word for it – check out some escrow testimonials from our esteemed clients to hear it directly from the source.