Steps in Closing

Loan Application

Usually, the buyer will have already made loan application or will within five working days after a Purchaser and Seller have signed a purchase and sale agreement. Reference the loan application checklist for items the lender will need.

Escrow

What is Escrow and why is it needed?

An escrow is an arrangement in which a disinterested third party, called an escrow holder, holds documents and funds on behalf of a buyer and seller, and distributes them according to the buyers and seller’s instructions.

What the Seller does in the escrow process:

  • Deposits the executed deed to the buyer with the escrow holder
  • Deposits evidence of any inspections or any required repair work
  • Deposits other required documents such as tax receipts, addresses of mortgage holders, insurance policies, new home warranty contracts, etc.

What the Buyer does in the escrow process:

  • Deposit funds required, in addition to any borrowed funds to pay the purchase price with the escrow holder.
  • Deposits funds sufficient for home and title insurance
  • Arranges for any borrowed funds to be delivered to the escrow holder.
  • Signs any deed of trust or mortgages necessary to secure loans.
  • Approves any inspection reports, title insurance commitments, etc. called for by the purchase and sale agreements.
  • Fulfills any other conditions specified in the escrow instructions.
  • Purchaser arranges for fire insurance on the new property.

What the Lender does in the escrow process:

  • Deposits proceeds of the loan to the purchaser.
  • Directs the escrow holder on the conditions under which the loan funds may be used.

What the Escrow holder does.

  • Opens the order for title insurance, if the lender has not already ordered.
  • Obtains approvals from the buyer on title insurance report, pests and other inspections.
  • Receives funds from the buyer and or lender.
  • Prorates insurance, taxes, rents, etc.
  • Disburses funds for title insurance, recordation fees, real estate brokerage, lien clearance etc.
  • Prepares final statement for each party, indicating amounts to be disbursed for services and any further amounts, necessary to close escrow.
  • Records deed and loan documents, delivers the deed to the buyer, loan documents to the lender, and funds to the seller, closing the escrow.

What Bart Cloninger does in the escrow process.

  • Communicates with all parties on a regular weekly basis or more if necessary to assure the process is proceeding smoothly with all required documents and facts available.
  • Acts to correct and eliminate any potential problems or delays that may occur along the way.
  • Accompany and assist you during the signing of the escrow and loan documents. (as necessary)
  • Be available for any questions or concerns.

Closing the Escrow

Once all the terms and conditions of the instructions of both parties have been fulfilled, and the closing conditions satisfied, the escrow is closed once the safe and accurate transfer of property and money has been accomplished.

Remember…I will be with you all the way.

WHAT EXACTLY DOES “CLOSING,” MEAN, AND WHEN DO I GET TO MOVE IN?

In Washington State, closing is considered the day that the deed is recorded into the buyer’s names and the proceeds are paid to the seller. When you can take legal possession of the property depends on the terms or conditions of your contract. But let’s digress for a moment.

Different states handle closing procedures different ways. In Washington State, buyers and sellers sign at separate times, typically two to three days prior to closing. Closings are predominately handled by Licensed Practiced Officers or Closing Agents working for attorney’s or title companies.

Prior to signing the escrow company will set an appointment with you to come in and sign. They will also give you, the total amount of funds to close, that you will need to bring to the signing in the form of a certified or cashiers check;

At this time, if you have not already informed your loan officer, you will need to provide proof of a household insurance. This is something you will want to take care of a few weeks prior to signing, or when your loan officer recommends it.

As far as possession is concerned, this can get very vague and confusing, when it really shouldn’t be. Let me explain. Legal possession can only occur when the deed is recorded and funds disbursed.