REMAX/OPTIMA 333 E Glenoaks Suite #100 Glendale, CA 91207
1. Offer/counter-offer(s) made and negotiated. Seller confirms that all utilities are on for inspections.
2. Copy of purchase contract and counter offers sent to lender and to escrow, officially “opening” escrow. The deposit monies are sent to escrow.
3. Buyer immediately orders all asset statements from 401K’s, retirement funds, pensions, CD accounts, etc. for lender as these take time to get (they must be current), in order to obtain loan approval and remove loan contingency within the required contract time frame.
4. Property disclosures/reports are given to buyer for approval within seven days, preliminary title report is ordered for title purposes. Buyer then approves reports/disclosures and removes contingency within required time frame (or disapproves and cancels the escrow and gets deposit money refunded).
5. Physical inspection is done by buyer. (Inspectors charge by the size of the property and are paid at the time the inspection is performed. Approximate cost: $300 and up, depending on the size (square footage) of the property, whether it’s a condominium, etc.
6. Report from inspector is reviewed by buyer. Additional inspections are ordered is needed (for example, if the roof leaks, the buyer may call out a roofer to estimate cost to repair). A response is made to the seller regarding approval/disapproval of the inspection.
7. Seller responds to buyer’s inspection response (if needed), buyer then responds to seller by either approving and removing the inspection contingency, by trying to renegotiate or by walking away, cancelling the transaction.
8. Escrow documents received and need to be completed and returned to escrow as soon as possible so that escrow may start processing the file. Notarization will be needed on some documents (escrow companies have notaries). If property is in trust by the seller, escrow will need certain copies of it for the title company, and they will be happy to make the copies for the seller.
9. Fire insurance must be immediately addressed by the buyer, properties in a high fire area may require “fair plan” coverage which may take a little longer to process (sometimes as much as three weeks to process). Once the decision of which insurance company is to be used, escrow must be told so that at close, they will take care of the payment to the fire insurance company as of the date of closing. This step is usually unnecessary for a condominium that has a homeowners’ association as the building is usually covered for fire by the association and is included in that Homeowner’s association fee that is paid.
10. Property appraisal is done by the lender.
11. Buyer’s loan is approved.
12. Buyer removes all contingencies by day 21 (in California).
13. Home warranty policy is ordered for buyer if needed.
14. For seller, if closing date is close to a property tax due date, best to take a cashier’s check to escrow with your stub to process for you, because they will need proof that check has cleared; otherwise they have to hold the tax money in escrow after close until they have verification that the tax was paid.
15. Physical inspection repairs agreed to by seller are immediately completed on property by seller after all contingencies are removed so that when the buyer does their final “walk-through” inspection (also known as Verification of Property Condition), all the promised repairs will have been completed.
16. Seller has pest repairs completed if agreed to. If “tenting” of the property is necessary, property will have to be vacated for two nights and three days if done Monday through Friday, three nights and four days if on a Saturday.
17. Buyer signs loan documents, seller signs Grant Deed. Both the loan documents and the Grant Deed need to be notarized. So either it can be done at the escrow office, or a travelling notary can be sent if needed.
18. The “walk-through” is completed by buyer, usually within five days of the close of escrow, and signs off on the Verification of Condition form.
19. Cashier’s check is prepared by buyer for the monies needed to close the escrow (also can be wired).
20. Buyer calls utility companies to transfer utilities using the transfer date as of the day of closing of escrow (cable and phones cannot be transferred).
21. Lender “funds” the loan (this is the process of money being actually transferred to the title company account from the bank for dissemination).
22. Deed and other necessary documents are delivered to County Recorder’s Office for recording.\
23. Escrow is notified that the recording indeed took place at which time officially, “escrow is closed.”
24. Keys are turned over to buyer unless the seller was given some days after close to move out.
25. Escrow officer concludes paperwork and disburses monies.