Karen Urata Realtor

Posts Tagged ‘Real estate transaction’

What Happens in Escrow?

In El Cajon, Escondido, La Mesa, Mission Valley, North San Diego County, Oceanside, Poway, Ramona, Real Estate, San Diego County, San Marcos, Santee, Vista on January 15, 2013 at 9:00 pm
Transaction Tuesday

Image courtesy of smarnad/FreeDigitalPhotos.net

Grab your coffee.  It is that time again, Transaction Tuesday where we answer all those questions you forget to ask about the real estate transaction process.  We answered the question not long ago about what escrow is so now we will touch on what happens during the escrow process.   My husband, Greg Urata, wrote a book called, First-time Home Buying in a Nutshell, and I am borrowing this description of the escrow process from it to share with you to help you know what to expect when you enter the escrow process.

The Escrow Process 

        1)  Getting the Purchase Agreement

After all parties to the contract have signed, the agent will open escrow and submit the contract to escrow.  Some states use lawyers in lieu of escrow to process the transaction.  This author is not familiar with how the transaction is handled in those states.

         2)      Escrow Instructions

Escrow will create escrow instructions outlining the specifics of the transaction.

3)  Preliminary Title

Escrow will order a preliminary title report.  A preliminary title report is a document that outlines information that is pertinent to the property such as easements, liens, encumbrances, etc that might compromise free and clear title to the property.  It is important for buyers to review this document to make sure they are not going to unknowingly encumber themselves through buying the property

 4)  Estimated HUD 1

This is a document that lists the preliminary financial accounting of the costs and financing amounts of the transaction.  There is a final HUD 1/Settlement Statement issued at the end of the escrow process to show the final costs and financing amounts of the transaction.

5)  Payoff Demand

This is a request made by escrow to the current mortgage holder of the existing loan(s) on the property for the total amount due to pay off the loan.

6)  Drawing Docs

The process in which the buyer’s lender prepares the documents (loan contract) to be sent to escrow to be signed by the buyer.  Escrow usually reviews the documents to ensure they are accurate.

7)  Signing Docs

When the loan documents are signed by the buyer in escrow (or by the lender) witnessed by a notary.

8)      Funding

The signed documents are returned to the lender and the lender then funds the loan by sending funds to the title company which, in turn, sends the proceeds to escrow for disbursement.

9)  Record and Closing

After funding, the title company records the title at the County Recorder’s Office.

While this does not cover everything that goes on during the process it does outline the basic items that your escrow officer is working hard to complete on your behalf during the escrow period.  Your agent is also handling many details that must be addressed prior to the close of escrow that are not touched on here.

I hope this helps make you feel more comfortable while you go through the transaction process.  If you have any questions please just give me a call.

See you in the neighborhood,

Karen Urata

DRE License # 01720025

B W Real Estate Group

(760) 609-0952

5-Star Award Winner  San Diego Magazine 2010, 2011, 2012

Serving Buyers and Sellers in San Diego County

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Welcome to Transaction Tuesday

In El Cajon, Escondido, La Mesa, Mission Valley, North San Diego County, Oceanside, Poway, Ramona, Real Estate, San Diego County, San Marcos, Santee, Vista on January 2, 2013 at 5:44 am
Image courtesy of smarnad/FreeDigitalPhotos.net

Image courtesy of smarnad/FreeDigitalPhotos.net

Welcome, grab a cup of coffee, sit down, relax and I will happily answer those “silly” questions you might have about special terms and other things that come up during a real estate transaction that you may have heard of but don’t really know for sure what they mean and never get around to asking about.

Let’s say you have been working with your agent to negotiate the purchase or the sale of your home.  The offer has been made and counter offers have been negotiated and an agreement has been reached.  Your agent calls you and says, “Congratulations, you are in escrow!”  She sounds happy and excited for you so you know that must be a good thing, but what exactly does being in escrow mean?

In a real estate transaction, escrow is a third-party that is selected in the negotiation process and is named in the contract.  This is the party who holds the deed to the property and the funds from the buyer and lender, (if you require a loan), and releases them to the proper parties when the property sale is recorded and the transaction is complete.

In the state of California real estate transactions go through the escrow process, however, some states use attorneys for this part of the real estate transaction.

The escrow process generally takes a while to complete as many details must be handled during this process.  One important element of escrow is ordering the preliminary title report.  This report shows ownership of the property and whether the seller has the authority to transfer the property.  It also helps to show encumbrances such as liens and easements that may be filed against the property that.  We can touch on some of those in a later post focusing on title insurance.

In most cases, sellers and buyers have the assistance of a real estate agent to help guide them through the many details that should to be completed during the escrow process.

Check back next Tuesday and we will talk a little more about the items that you might hear about during the escrow process. Until then, make it a great week.

If you have a real estate question you would like to submit for consideration as the subject of a future Transaction Tuesday blog post please email your question to uratakaren@yahoo.com.

See you in the neighborhood,

Karen Urata

DRE License # 01720025

B W Real Estate Group

(760) 609-0952

5-Star Award Winner  San Diego Magazine 2010, 2011, 2012

Serving Buyers and Sellers in San Diego County