Proceeding with Escrow
We are now in the home stretch! The escrow period is the final stage. You have worked hard to prepared your home to sell. You have educated yourself to price the home properly. You staged your home to make a great impression on buyer. You received an offer and accepted it!!! What happens till you turn the keys over to the new owner?
You may think that once a sale agreement has been signed that the selling process is complete. Not only is it not over yet, but some of the most complex aspects of a real estate transaction now begin.
A sale agreement sets not only a purchase price for the home, but also a series of terms and conditions. For instance:
- Contracts depend on the ability of a buyer to obtain financing, which is why all sellers demand buyers with preapproval letters from lenders. The buyer should also provide the seller a LSU loan status update within 5 days of the contract being signed. This ensure that the buyer can actually acquire a loan.
- Most transactions involve a home inspection. There is a 10 day inspection period that allows the buyer to investigate the home and the neighborhood the home is in.
- Lenders will establish numerous conditions before granting a loan. They will want a title exam, title insurance to protect against title errors, a termite inspections, possibly a survey and an appraisal to assure that the home has sufficient value to secure the loan
The the buyer typically arranges all required inspections. The sellers Realtor® is tracking the time to insure that the buyer is accomplishing all the required tasks for the home to move on to closing. Together they move the process along and verify that the title company and lender are moving toward the required closing date.
Property inspection and appraisal phase of Escrow
The next 10 days are referred to as the inspection period. You will have your home examined by a Home Inspector and a termite inspector. They will look for damage and defects on the property. A full report will be prepared to document all the findings. You will then have the opportunity to request repairs from the seller or a reduction in price in lieu of the repairs The seller has the option to repair or refuse. If an agreement is not reached the buyer can cancel the contract and receive the earnest money back. During this time you should do your due diligence and research the area, talk to neighbors and use the buyers advisory to look into any aspect of the home that could be an issue to you.
Once the inspection period is complete an appraisal is ordered. The lender selects the appraiser. The appraisers opinion of value will be presented in a full report. If the house appraises below the purchase contract amount the buyer can cancel the contract or renegotiate the price.
Processor’s, underwriter’s review and final loan approval phase of escrow
Now the loan processor reviews the entire loan file and sends all the pertinent information to an underwriter who makes the final decision to approve the loan. If you had a pre approval and have not quit your job or bought a boat….this is a slam dunk. Keep in mind that there may be financial conditions or property conditions that may need to be met before loan approval.
The final loan and escrow documents are prepared and signed by both the buyer and the seller. At this time you will wire or provide a check to the title company for the down payment.
A wire or check for the amount of the loan is sent to the title company from the lender.
Close of escrow
The documents are recorded with the county.
Confirmation of recording
The title company authorizes the escrow company to draft a check to the seller and the buyer gets the house key!!!
Congratulations!!! You can now move on!!!