Prepare and present your property
In a real estate transaction, escrow is an independent third party that holds important documents and funds. When opening escrow, the buyer and seller determine the terms and conditions for the transfer of ownership of the property via the purchase contract. Escrow ensures that all mutually agreed upon terms and conditions are met prior to the transfer of ownership and distribution of funds.
Escrow protects both you and the seller by managing the following tasks:
• Holding buyer’s good-faith deposit (typically 3% of the purchase price).
• Disclosing escrow and title fees to the buyer’s lender.
• Calculating prorated taxes and HOA fees.
• Providing a title report and title insurance.
• Ensuring that state and local transaction laws and rules are followed.
• Obtaining all necessary and notarized signatures from all parties.
• Ensuring the paperwork is legal and binding.
• Recording the transfer documents and insuring their accuracy.
• Receiving the down payment from the buyer.
• Receiving funds from the buyer’s lender.
• Paying liens, overdue tax, and HOA dues.
• Distributing proceeds to the seller.
Escrow FAQs
When do we need to open escrow?
We will open escrow on your behalf after the contract has been signed by both you and the seller. After escrow is opened, you have three days to wire your 3% deposit money into escrow.
What does an escrow officer do?
Your escrow officer will oversee all aspects of your real estate transaction, such as signing paper-work, completing a title search and obtaining hazard and title insurance.
Why do properties fall out of escrow?
Often, there is a problem with the loan where the appraisal comes back lower than the offer price, or a structural problem is discovered during an inspection.
How long does escrow take?
The length of escrow is determined by the purchase agreement. Depending on the terms, it can last a few or even 90 days. A typical escrow in the Bay Area is 21-30 days.
