Escrow: Now What?
Congratulations, you are on your way to owning your very own home! Follow these suggestions (and the advice of your Realtors®) so that escrow and settlement will go as smooth as possible.
You will be asked for a down payment on the home you are purchasing. This will be submitted to your real estate attorney on an agreed upon date. Remember, the more you put down toward the total price of your home, the less time it will take you to pay off and the less your mortgage payments will be every month.
During this period of purchasing your home, you are going to need a real estate attorney to represent you. The attorney will hold your deposit and coordinate much of the activity that goes on during the escrow period. Make sure that there are sufficient funds in your account to cover this check.
1. The period that you are "in escrow" is often 30 days, but may be longer or shorter. During this time, each item specified in the contract must be completed satisfactorily. By the time you have opened escrow, you have come to an agreement with the seller on the closing date and the purchase price. Each contract is different, but nearly all include an inspection contingency. This should be done as soon as possible after attorney review is completed.
2. Financing contingency. Once the contract is signed, you have a period of time to secure funding. If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and take your chances on getting a loan. You may choose to cancel the contract.
3. A requirement that the seller must provide marketable title. An attorney or title officer will review the title report. The title must be "clear" to ensure that you do not have legal issues regarding your ownership.
4. Secure homeowner's insurance. This will probably be required before you can close the sale. Due to such requirements as fire or flood insurance, obtaining homeowner's insurance may require a lengthy period of time. It would be in your best interest to discuss obtaining homeowner's insurance with an agent once attorney review is completed.
5. Contact local utility companies. Schedule to have services turned on when you close escrow. The Jackie Safran Group will assist you with names and phone numbers.
6. The final walk-through inspection. The Jackie Safran Group will schedule this inspection (generally, the morning of closing). At this time, you should make sure that the property is exactly as the contract says it should be and is left in good condition (the contract states "broom clean").
You've made it! Once the sale has closed, you're the proud owner of a new home. Congratulations!