Escrow Procedure: Opening Escrow
Be prepared with all the information required by the escrow holder upon opening of escrow. Full names and addresses of all parties, including telephone numbers.
Where to send escrow instructions upon completion.
Deposit taken at the time of the offer, time elements for additional deposits and the escrow period.
Total cash down payment from Buyers.
Loan information as complete as possible. If you know who the new lender will be, tell your escrow officer up front so he or she can immediately begin to process the necessary paperwork.
Contingencies and time limits therefore.
Existing loan information, include loan numbers and persons to contact if known.
Personalities of the parties can be crucial. If you have a Buyer/Seller who is nervous in any way about a transaction, telling your escrow officer can eliminate a number of problems. If there is a Buyer/Seller whom you feel should only be contacted by the agent/broker be sure to advise your escrow officer so she will make a note on the file and avoid unnecessarily upsetting your clients.
Be present with your client/Principal when they are signing escrow instructions and be aware of the importance of the completion of all forms sent with those instructions. Be able to explain to the parties why such forms need to be completed and how it can eliminate problems in their transaction. Copies of those forms are also attached so that we can go over them now.
Know the order and time elements of your escrow transaction so that we can status a file with you periodically and you will know how your escrow is proceeding.
Know the time elements involved with new loans, documents and fundings so that you and your clients know exactly what to expect, especially after loan approval has been received.
Know what is involved in the processing of a new loan application and assist your clients in obtaining the information and documentation required in order to obtain timely loan approval.
PROBABLY, in addition to the loan information the singularly most important information you can provide your escrow officer is "HOW IS BUYER GOING TO TAKE TITLE"? This question is frequently overlooked and can delay the closing of your escrow for a number of reasons:
(1) Make a clear copy of your offer and any counters and/or addendums, and deliver to escrow personally or via fax.
(2) Provide escrow holder with name, address and phone number of the new lender.
(3) Let the escrow officer know how you would like your paperwork handled. You may want the escrow instructions mailed directly to the client, or you may prefer to hand-deliver them yourself for signature. It is more work to hand deliver them, but it gives you that second chance to "bond" with your buyers or sellers and answer any questions they may have. Do not be afraid to tell them you do not know the answer to a question if you do not. Explain that since you are not an escrow officer, it would be best for you to get back to them with the answer, or if they prefer they may call the escrow officer directly and ask questions.
(4) If you have a property profile, take it to escrow, so that the escrow officer does not have to wait for a legal vesting from the title company. This will quicken the procedure for obtaining your instructions.
(5) Give the buyer a vesting sheet and have them decide how they want to take title and advise the escrow officer when opening the escrow. Some companies send escrow instructions with "Vesting to be furnished in escrow." This delays the process as the deed cannot be drawn until the vesting is known. It is best to handle this situation up front. Do not give advice on how to take title, just give them the sheet to read and decide for themselves.
(6) Try to keep "MEMO" items out of your escrow instructions. They are in your contract and do not need to be spelled out again in the escrow instructions. Escrow instructions are instructions to the escrow holder as to what they should be doing.
Escrow Procedure:Escrow Processing
Information that will be requested and/or appreciated by your escrow officer:
a. The lender will not draw loan documents until they have been advised as to how the Buyer will take title.
b. The Grant Deed cannot be drawn until we know the status of the Buyers and how he/she/they will take title.
If you have a thirty day escrow, which is really difficult today, and you are not able to draw the Grant Deed when you are preparing your escrow instructions it can delay your transaction. Consider if your seller is out of town or meets an untimely end during your escrow transaction. The problems can then become monumental.
BE FAMILIAR WITH JOINT TENANCY/COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP/TENANTS IN COMMON/COMMUNITY PROPERTY LAWS.
Be familiar with the Business and Professions Code and the California Civil code covering financing, interest rates, late charges, prepayment penalties, etc.
Be familiar with the notarial laws. While most escrow firms have notaries in their offices your principals may not always be able to present themselves during regular business hours. It is a good idea to have a notary, whether in our office, or somewhere near by that can handle your after hours requirements. NOTARIES MAY NOT notarize signatures for parties that have not presented and identified themselves. OUT OF STATE NOTARIES MUST CONFORM TO CALIFORNIA FORM.