Selling real estate in California involves several intricate steps, one of the most critical being the escrow process. This process acts as a neutral intermediary, holding funds and important documents during the transaction. Understanding the escrow process can help sellers navigate through the sale smoothly.
Here’s a breakdown of the steps involved:
1. Opening Escrow: Once you’ve accepted an offer on your property, the next step is to
open an escrow account. Typically, either the seller’s or buyer’s real estate agent, or
sometimes a title company, initiates this process. They will collect the necessary
documents and earnest money from the buyer to kickstart the escrow.
2. Deposit of Earnest Money: The buyer will submit an earnest money deposit, which is
held in the escrow account. This deposit demonstrates the buyer’s sincerity in
purchasing the property and is usually a percentage of the purchase price.
3. Title Search and Examination: A title company will conduct a title search to ensure
there are no liens, encumbrances, or legal issues with the property’s title. This step is
crucial to confirm that the seller has the legal right to sell the property.
4. Inspections and Disclosures: The buyer may conduct various inspections, such as home
inspections, pest inspections, and environmental assessments. Sellers are typically
required to provide disclosures about the property’s condition and any known issues.
5. Loan Approval and Appraisal: If the buyer is obtaining financing, they will work with
their lender to secure a mortgage. The lender will order an appraisal to determine the
property’s value, which is essential for finalizing the loan.
6. Contingency Removal: Once all inspections are completed and any contingencies are
satisfied, the buyer can remove contingencies, signaling their commitment to proceed
with the purchase.
7. Finalizing Documents: Both parties will sign a myriad of documents, including the
closing statement, deed, and various legal disclosures. The escrow officer ensures that
all documents are properly executed and recorded.
8. Closing Funds: The buyer will transfer the remaining funds needed to purchase the
property to the escrow account. This includes the down payment, closing costs, and any
other agreed-upon fees.
9. Recording the Deed: Once all funds are received and documents are signed, the escrow
officer will ensure the deed is recorded with the appropriate government office. This
officially transfers ownership of the property from the seller to the buyer.
10. Disbursement of Funds: After the deed is recorded, the escrow officer will disburse
funds accordingly. Sellers receive their proceeds from the sale, and any outstanding
obligations, such as paying off existing loans or liens, are settled.
11. Closing Escrow: With all funds disbursed and documents recorded, the escrow process
is complete. The buyer takes possession of the property, and the sale is officially closed.
Navigating the escrow process when selling your home requires attention to detail and
adherence to timelines outlined in the purchase agreement. Don’t worry that’s what I am here
for, streamlining the process and ensure a successful transaction. I’m just a call away
805.660.8219