An Escrow Primer

Thursday, January 8, 2015 | 8:30 pm

The transfer of real property ownership in Southern California is processed by a neutral party known as an Escrow Officer. The Escrow Officer holds the Buyer’s funds and the Seller’s Grant Deed until all the conditions of the purchase contract have been met. Once the conditions have been met (usually 45-60 days from the time the purchase contract is signed), the Escrow Officer authorizes the Title Company to record the Grant Deed, and releases the Buyer’s funds to the Seller.

The Escrow Officer works for both the Buyer and the Seller, and can act only according to specific written instructions given by both parties. The steps followed by an Escrow Officer in a conventional transaction might be as follows:

• Receive buyer’s initial deposit.

• Prepare escrow instructions to reflect the terms of the purchase contract, counter offer and addendums, if any. Obtain Buyer’s and Seller’s signatures on escrow instructions.

• Order title search and receive preliminary title report. Distribute copies of preliminary title report to all parties and obtain approval from Buyer.

• Request “demands” (loan pay-off statements, the current balances owed) from Seller’s current lenders.

• Obtain Seller’s signature on Grant Deed. Hold Grant Deed until all terms are meet, and all money is depoSited.

• Calculate prorations on property taxes, rents, insurance, or other expenses as required.

• Communicate with Buyer’s lender to obtain final loan approval. Order Buyer’s loan documents, and obtain Buyer’s signatures on loan documents.

• Process and package loan documents and deliver to lender. Receive Buyer’s down payment funds and request funds from Buyer’s lender.
• Order recording of Grant Deed to Buyer and distribute all funds: Pay off existing loans; pay required costs, such as termite work and completion; release net proceeds to Seller.

It is your Realtor’s job to make sure the the Escrow Officer does his or her job. In other words, make sure that the escrow instructions accurately reflect the terms of the purchase contract; make sure all the terms of the contract are met according to the time frames specified in the contract; verify that the termite work has been completed and certification issued; verify that the Buyer has received final loan approval; and do anything else required to insure that your escrow period goes as smoothly as possible, and that your escrow closes on time.

Concierge for Homes, 140 S. Lake Ave., Pasadena, (626) 351-5999, or visit



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