Escrow is the process that starts when your purchase offer is accepted by the seller. It ends when you become the new registered owner of the property.
5.2 Title Company
You will need to select a title company, which acts as a neutral third party holding all instruments necessary to the sale, including funds and deed. The title company will research the complete recorded history of the property, to insure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities from building to parking restrictions. There may be recorded easements and encroachments, where others have limited rights to use your property.
5.3 How to Hold Title
You may wish to consult with an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.
5.4 Option Period
Once your offer is accepted by the seller, you enter into a time period known as Option. It is during this time that all inspections and, if necessary, further negotions take place. The option period is made possible by a non-refundable check being given to the seller by the buyer. Amounts typically are around 1% of the entire transaction. The option period gives the buyer the “unrestricted” right to terminate the contract.
Once your offer is accepted by the seller, you’ll need to have professional inspectors evaluate your home’s major systems. Your agent may recommend other inspections, such as roof, chimney/fireplace, structural, well, septic, pool/spa, arborist or mold.
5.6 Appraisal and Lending
Keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. The lender will often send an appraiser out to the property and you may pay a fee for this service. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, and recent sales of comparable properties. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.
For more information and for any additional questions, please feel free to contact us at any time.