On Real Estate & More – November 2017

What happens during the escrow period after a buyer and seller enter a purchase agreement? As the seller, you may think you won’t have to do much during this time except sit back and wait; however, there is considerable work that needs to be done before you can sell that home! Although each transaction is unique, this article explains the steps of what goes on in a typical transaction for a seller

  1. Once you have come to an agreement and all parties have signed the sales contract, you are officially in escrow. 
  2. Escrow is opened with a title company. Your broker opens escrow by sending a copy of the sales contract & any addendums to the title company, as well as all parties involved.
  3. Your broker will verify the buyer’s earnest money has been deposited as per the sales contract.
  4. Your broker will ensure that either proof of funds (if this is a cash purchase), or a pre-approval letter is provided as per the terms of the sales contract.
  5. Your broker will keep in contact with the other agent about any inspections that that were requested in the inspection addendum. This most commonly includes a home inspection, pest report, and in rural areas, pumping of the septic tank and a septic inspection, as well as a well flow report and water-quality testing. The buyer’s agent typically attends these inspections; however, your agent may be called upon occasionally to open the house, if needed.
  6. Based upon the results of the inspections, further negotiations and/or repairs (repair addendum) may be necessary if the buyer requests repairs. Copies of any signed addendums need to be provided to the title company and buyers’ agent, if applicable. Your agent may assist you with coordinating any needed repairs. Once the requested repairs have been completed, your broker typically provides receipts of the repairs to the buyer’s agent.
  7. A seller disclosure form, in which the seller discloses any known issues about the property, is provided to the buyer’s agent. The buyers typically have 5 business days to review the seller disclosure and find it to their satisfaction. If they have questions, your broker will ask you to respond to the questions as quickly as possible.
  8. A preliminary title report will be ordered by the title company. Once the title report is received, both buyers and sellers typically have 5 business days to review. Your broker will read through the title report to make sure there isn’t anything that would raise an alarm.
  9. If the buyers are obtaining a loan for the purchase, their lender will order an appraisal of the property. Your broker will keep in touch with the other agent to make sure the appraisal has been ordered.
  10. If not already completed, your broker will keep in contact with the other agent to make sure the earnest money is transferred to the title company.
  11. Once all repairs are completed and all parties are ready to close, the buyer’s agent should prepare a receipt of reports and removal of contingencies for signature.
  12. Your broker works with the title company to coordinate timing of signing closing documents.
  13. Your broker will provide you with a list of utility numbers so you can cancel utilities in your name upon closing. Your broker will also remind you to cancel your homeowner’s insurance as of the date of closing.
  14. Your broker shall review the estimated settlement statement and provide you a copy for your information.
  15. Your broker goes with you to the title company while you sign your closing documents.
  16. Once the property records into the new buyer’s name, your broker contacts you about the transfer of ownership. Your broker also arranges to get the new buyers keys to the property and reminds you to leave home warranties, extra keys, garage door openers, etc.

Congratulations! You have just sold your home!