So you are in escrow… congratulations! But your work isn’t done yet. Here is a list of what to expect during escrow. This is just a general overview of the process, but your transaction may be different. Always check with your agent to make sure you know what to do to get your transaction closed on time.
Your agent will open the escrow for you as soon as the purchase agreement is fully signed by both the buyer and seller. You should receive the escrow number and contact information for your escrow officer. If you are a buyer and will be getting a loan for the purchase, your lender will need the escrow number and contact information.
Buyers will need to submit their Earnest Money Deposit into escrow within the timeframe stated on the purchase agreement (default is within 3 days of acceptance). You can either write a check or have the money wired directly to escrow. WIRE FRAUD ALERT: Always call the escrow company directly to get the wiring instructions before wiring money! Never go by wiring instructions that are emailed to you unless you verify them over the phone with the escrow officer.
PRELIMINARY TITLE REPORT
Soon after the escrow is opened, buyers will receive the preliminary title report from the escrow company. You will want to look over this report closely. You should contact the escrow officer to have them answer any questions you have regarding the information on the report.
LOAN APPLICATION AND DOCUMENTS
Buyers should have already contacted a lender prior to submitting an offer and have started the loan process. You will want to get a list of all documents required by your lender so that you can start working on sending them everything they need. Most escrows that fall apart due so because of a delay in the loan process, so staying on top of what your lender needs is very important.
Your lender will provide you with a loan estimate within a few days of you submitting your application. This includes all of the costs associated with you getting the loan, and will give you a good idea of how much money you will need to get into escrow to close.
Do not make any large purchases or sales while you are in escrow, as these will affect your loan approval. If you do need to make a large purchase, such as if your car breaks down and you need to get a new one, make sure you talk to your lender to let them know what is going on. They may have advice for how to proceed that can help you.
Sellers are required to give the buyers specific disclosures within a few days of the purchase agreement being accepted (usually defaulted to 7 days). Your agent will assist you and give you all of the disclosures that are required by law, as well as some disclosures that are specific to the local Lake Tahoe area. Most of the disclosures are regarding any issues or defects with the property that you are aware of.
What should you disclose? The best rule of thumb is that if you are aware of something, even if it has been fixed recently, you should still disclose it. Basically, put yourself in the buyer’s shoes. If you were the buyer, wouldn’t you want to know about past plumbing leaks (even if they have been fixed) or problems with drainage on the property?
It is always recommended that buyers have a home and pest inspection done on any property they are purchasing. Your agent will recommend local inspectors you can use and then set up the appointments for you. These reports will give you a detailed look at the condition of the house, including in the sub-floor area and attic space. Buyers can then ask the seller to repair something, or ask for a credit for the cost of the repairs. California and Nevada laws differ on the rules for requests for repairs, so talk to your agent to get more information.
2 weeks before you are scheduled to close escrow, buyers should get home insurance set up for the house. Here is a link to view the local insurance companies that I recommend. If you are getting a loan for the purchase, your lender will need the home insurance information as well as the escrow company.
Buyer will need to set up the utilities in their names. The local escrow companies take care of transferring the water, sewer, garbage (CA only). But you are responsible for the power, gas, telephone, cable, and internet. Phone, cable, and internet can be set up at a later date if you don’t need them right away when escrow closes.
Sellers will need to check with their cable, phone, and internet providers to close their accounts. You may have equipment that you are leasing from the company that needs to be returned.
- Power (CA) – Liberty Utilities, 800-782-2506, https://libertyutilities.com/
- Power (NV) – NV Energy, 775-834-2900, https://www.nvenergy.com/
- Natural Gas (CA & NV) – Southwest Gas, 877-860-6020, https://www.swgas.com/
- Refuse (CA & NV) – South Tahoe Refuse, 530-541-5105, http://www.southtahoerefuse.com/
- Cable/Phone/Internet (CA & NV) – Charter Spectrum, 888-438-2427, https://www.spectrum.com/
- Phone/Internet (CA & NV) – AT&T, 800-310-2355, https://www.att.com/
Both the buyer and seller have contingencies written into the purchase agreement. In simplest terms, contingencies give parties the right to back out of the contract under certain circumstances. It is very important to understand what contingencies you have, and what you need to do about them. Your agent can help explain them to you, and let you know if you need to take any action. The most important contingencies are as follows:
- Buyers Inspection
- Review of Title
- Sale of Another Property (if applicable to the buyer)
- Purchase of Another Property (if applicable to the seller)
- Loan & Appraisal
A couple weeks before you are scheduled to close escrow, you will receive paperwork from the escrow company. This paperwork includes forms you need to fill out about how you will take title to the property.
SIGNING THE CLOSING DOCUMENTS
Once the buyer’s lender has sent the loan documents to the escrow company, it will be time for the buyer and seller to sign the closing documents. You will be contacted by the escrow officer to set up the signing appointment. It can take place in the city where you live, or be done at your home with a traveling notary.
If the buyers are not getting a loan, and instead are paying cash for the property, the signing will be pretty quick. But if there is a loan involved, buyers should expect the signing to take at least 30 minutes, since there are a lot more documents for transactions with a loan compared to cash purchases. Sellers have a lot fewer closing documents than buyers, and usually only take 10 to 15 minutes to finish signing.
CLOSE OF ESCROW
Congratulations! You have sold/purchased your home.
As you can see, the escrow process isn’t that difficult, especially if you have a good agent on your side to help you through the process.
If you are thinking of Buying or Selling your Lake Tahoe home, you should contact an agent who has the experience and knowledge to make your transaction as smooth as possible. Read my reviews from past clients, and then contact me so I can start working for you.
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