After all of the contingencies have been cleared by buyer and seller, your loan approved and documents have been drawn, you are now ready to close escrow.
Final Walkthrough
Before the close of escrow, the buyer has an opportunity to do a final walkthrough of the property. This may be the first opportunity to examine the house without furniture depending of timing of the seller moving. Check everything carefully, including any work the seller has agreed to do in response to the inspection’s findings, though this should have already been cleared and reexamined. Any problems discovered previously that you find uncorrected which the seller agreed to correct, should be brought up immediately.
Schedule Signing Appointment
Your escrow officer or realtor will contact you to make an appointment for you to sign your escrow documents and final loan papers with a notary. At this time, the escrow officer will also tell you the amount of money you will need to close (in addition to your loan funds) and all re. Your loan funds will be sent directly to the escrow by the lender via wire. You will sign your escrow instructions and loan documents with a notary at an escrow company office, your real estate agent’s office or another location agreed upon.
Wire Balance of Funds to Escrow
In order for escrow to close, you must provide what is known as “Good Funds.” This means that escrow can close on the same day on the same day as your deposit if the final down payment and closing funds are deposited by wire
Escrow Appointment and Signing
Once your loan is approved, you will be asked to go to sign the loan documents and escrow instructions that specify disposition of your loan funds. You will sign these documents in the presence of a notary public. When you’ve signed everything, your lender will make one final review of the documents and conditions for closing. Once completed, the lender will send the loan funds to escrow. Below is a list of items you will need in preparation for the appointment to sign escrow papers:
- Identification — one of the following forms of identification must be presented at the signing of escrow in order for the signature to be notarized: a current driver’s license, passport, State of California ID card.
- Proof of Wire / Cashier’s check— you need a cashier’s check, or a certified check issued by a California (or your state) or your financial institution made payable to the title company. Ideal situtation is to wire funds to escrow.
- Fire and Hazard Insurance — you must have fire and hazard insurance in place before the lender will send the money to fund the loan. Whenever you buy a home, you must have insurance. Provide your escrow officer with the insurance agent’s name and contact information so they can make sure that the policy complies with your lender’s requirements.
After you have signed all the necessary instructions and documents, the escrow officer will return them to the lender for a final review. Upon completion, the lender advises your escrow officer that the loan is ready to be funded.
Close of Escrow
Once all the conditions of the escrow have been satisfied, the escrow officer advises you of the date the escrow will close and takes care of the technical and financial details. The culmination of the transaction, an escrow closing signifies legal transfer of title from the seller to you. Usually, the Grant Deed and Deed of Trust are recorded within one working day of the escrow officer’s receipt of loan funds or on same day depending on timing. This completes the transaction and signifies the “close of escrow.”
Escrow will record the deed of trust, disburse the funds, provide both parties with a final financial accounting in the form of a settlement statement, and close the escrow. You will receive the following post closing:
- Settlement Statement
- HUD-1 Form (itemizes services provided and the fees charged, it is filled out by the closing agent and must be given to you at or before closing)
- Truth-in-Lending Statement
- Mortgage Note
- Mortgage or Deed of Trust
- Keys to your new home (depending on time of possession as defined in the purchase agreement)
Disbursement of Funds in Escrow
In some cases, the escrow agent will be instructed to hold funds in escrow to pay off obligations, which may not be completed until after the close. For example, funds may be set aside to correct a structural problem, remodeling or termite repair work. Upon completion of the project, the escrow agent, having received proper documentation and releases will disburse the reserved funds.
Receipt of Deed by Buyer
The original deed to your home will be mailed directly to you at your new home by the County Recorder’s office. This usually takes several weeks.
After Close of Escrow
If the funds from the new loan are being used to pay off an existing loan, the old lender is required by law to issue a full reconveyance (release) of its loan. As soon as the deed of reconveyance removing the previous deed of trust is received, it must be recorded and the original will be returned to you. This may take several weeks. However, this delay is normal, and is nothing to be concerned about. Your lender may retain this loan in its own portfolio or may sell the loan to either a private or public agency such as Fannie Mae