Step 4 -A Little Work
What happens in Escrow?
In Arizona the Escrow company is a neutral third party, that is authorized by the State of Arizona, to help the buyer and seller close the contract. They hold the buyers, sellers and lenders legal documents and funds. The Escrow company then distributes the funds according to the contract.
The Escrow Company makes sure that all parties receive title insurance and that the title is passed on to the new buyer correctly. The Title company may be the same as the Escrow or separate but the Escrow company coordinates all these functions with the Title company. This safeguards the buyer and seller so that all the legal paperwork and funds distribution is done correctly.
Title insurance benefits the buyer by verifying that the seller has clear title, without problems, that can be passed on to the buyer. If some problem arises in the future the title company will correct the error.
The escrow officer helps coordinate the work of title officers, real estate agents, mortgage brokers, termite inspectors, insurance agents and others involved with the closing. Everyone can move forward to closing.
All the details of escrow and title are spelled out in the contract which the escrow officer follows. The escrow company has a long list of duties to perform for closing including:
- Where the monies for closing will come from
- Contract conditions determining lapse or breach
- How to disburse funds for recording, title insurance, real estate commissions, loan payoffs, HOA fees, and other closing costs.
- How to prorate insurance and taxes
- How to pay property liens or charges
We will go over the contract together so you will know what we are offering the seller. In the offer we include the amount of Earnest Money we will be giving to the Escrow Company we name, to show your strong intention to buy. The offer will discuss the financial aspect of your purchase including down payment and loan information. The contract talks about disclosing important facts that will be given to us in a separate document, so that we know what we are getting.
We will discuss the possibility of having a home inspection and getting Home Warranty Insurance (not to be confused with Home Owners Insurance). The Home Warranty provides a year of maintenance for most mechanical, electrical and plumbing in the home for a small service fee.
So the final piece is what happens if buyer or seller don't follow through with the contract, the Remedies are spelled out for each. This remedy may be mediation, arbitration, or court action depending on the situation. This rarely happens but it is nice to know it is available.
Now that we have all that behind us, as the buyers advantage expert I present the offer to the sellers agent and perhaps the seller and begin negotiations. Now I work very hard with the agent and seller to show your point of view and show off all the hard work we did. As a negotiation expert I always plan with you on how we will present the offer. We talk about what we might be will to negotiate you and seller both feel that you have a won on the deal.
Now when we get a response if we need more negotiations, I will go to bat for you until you are satisfied. My 20 years experience in real estate will be supporting your offer. Remember you have my team and me to help you in every step.
Once the offer is accepted we have 10 (ten) days to do inspect the home. We can go along with the inspector and learn about the home. You will receive a detailed report from the inspector and we can all review it together. Any repairs will be requested in writing and the seller has 5 (five) days to respond.
After we complete the inspections and get satisfactory response we move forward to closing.
The Escrow/Title Company takes care of monies and paper work showing the final settlement between buyer and seller. They also make sure that all the loan documents are signed and sent back to the lender. Finally they make sure the deeds are recorded and you own the property.
Call me now to get started 480-694-8807 or
