The Beginning of Escrow
Your escrow began when you accepted a buyer’s purchase offer and any related counter offers. After escrow is opened, the escrow company will keep the buyer’s initial deposit. What follows is the inspection and appraisal of your home and the loan origination process.
The Title Company. Traditionally, the seller selects a title company, whose job is to examine and insure title to the property. After researching the complete recorded history of your property, the title company will certify: 1) that your title is free and clear of encumbrances (e.g., mortgages, leases or restrictions) by the date of closing; and 2) that all new encumbrances are duly included in the title. The title company will draw up a preliminary report as part of this process, which will be provided to you for review.
Contingencies. A contingency is a condition that must be met before a contract becomes legally binding. In California, a homebuyer normally has seventeen days to complete all inspections, evaluations, and to review disclosures and reports prior to removing their purchase contingencies.
During this timeframe, the buyer normally goes over every aspect of the property, as provided for by purchase agreements, including:
- Obtaining financing and insurance
- Reviewing all pertinent documents, such as neighborhood restrictions (CCRs), preliminary title reports and disclosure documents
- Inspecting the property (the buyer has the right to determine the condition of your property by subjecting it to a wide range of inspections, such as roof, termite/pest, chimney/fireplace, property boundary survey, well, septic, pool/spa, arborist and/or mold)
Normally after all the inspections are completed and before purchase contingencies are removed by the buyer, the buyer will submit a list of requested repairs to the seller. How do you respond objectively and fairly to the buyer when a renegotiation is demanded while acting in your own best interests? This can sometimes be a stressful activity and is another key reason why an experienced agent, such as myself, with good negotiation skills and a proven track record is essential. This is when a professional listing agent can make a huge difference in the outcome of the transaction.
Loan Approval and Appraisal. I suggest that you accept only buyers with a financing pre-approval or pre-qualification letter. In addition, you should expect an appraiser from the lender’s company to review your property and verify that the sales price is appropriate.
Ready to Go? Don’t pack your bags just yet. Something unexpected might happen – for instance, a buyer’s contract could fail to push through contingency removal. There’s a proper time to start preparations for moving. Based on my extensive experience with such transactions, I’ll help you determine when that time will be.