California Property Guideto Escrow Closing
This escrow guideline is a sample of a basic escrow for a California real estate closing. This sample is purely for informational purposes, timelines can change based on a variety of issues.
California Escrow Timeline
Receive New File - The escrow in California is initiated when the escrow officer has received the signed purchase and sale agreement from the real estate broker/agent along with the deposit check opening escrow.
Open New File - The escrow company will open an escrow and assign a number along with ordering a preliminary title insurance report.
Obtain Signed Escrow Instructions - Escrow Officer sends the initial escrow instrustions to buyer and seller requesting and verifying loan number, utilies addresses, social security numbers, Home owners association, and insurance.
Preliminary Title Report - Once Received the preliminary title is disributed to the envolved parties by escrow, by using us this process can be done electronically. Title reports can show challenges to the real estate transaction, such as judgements, liens, second mortgages and other encumbrances, which must be addressed to clear title on the real property.
Prepare Closing Documents - Escrow prepares documents for signing (Statutory Warranty Deed, IRS Reporting Requirements, Settlement Statement, Excise Tax Affidavit, etc.) GRAND DEED NOT WARRNATY DEED, NO EXCISE TAX AFFIDAVIT ON RESIDENETAL ALL DOCUMENTS LISTING ABOVE WITH THE EXECPTION OF THE LOAN DOCUMENTS AND SETTLEMENT STATEMENT GO WITH THE ORIGINAL OPENING PACKAGE
Receive Loan Documents - Escrow receives loan documents from buyer's lender. (approximately 2-4 days before closing)
Prepare Settlement Statement - Escrow prepares settlement statement reflecting buyer's loan charges based on Lender instructions, copies loan documents for buyer and prepares file for signing. (PRPEARES SELLERS ESTIMATED STATEMENT ALONG WITH COPIES OF ALL INVOICES TO BE PAID BY SELLER FOR APPROVAL) ORDER INSURANCE FOR BUYER
Schedule Signing Appointments - Escrow contacts buyer and seller to set appointments for signing closing papers and to advise buyer the required amount of closing funds to bring.
Signing - Buyer and seller sign closing documents and buyer deposits necessary closing funds. Buyer signs 2-3 days before closing; Seller may sign earlier provided all necessary information has been received.
Loan Documents to Lender - After signing, escrow returns signed loan documents to lender for final review. Escrow sends deed, deed of trust, and any other documents to be recorded to title company to hold until closing.
Lender review documents and requests any funding conditions that may be necessary
FUNDING DAY - Lender Funds the loan and send funding figures to escrow; Once wire is received by title, escrow instructs title company to record docs.
Receipt of Lender Funds - Escrow receives excess lender funds via wire transfer from title after title has made payoffs of any encumbrances on the preliminary title report
Recording - Escrow receives recording number from title company indicating that documents are recorded, meaning that closing has taken place.
Disbursement of Funds - Upon recording, escrow disburses all funds, including paying all transactional costs, broker commissions, and then disburses sale proceeds to seller. All costs are then reflected on the Final Settlement Statement sent to the parties upon closing.
Post-closing - Following closing of transaction, escrow has certain continuing duties, including obtaining a release of deed of trust or other security instrument for recording with the county (TITLE DOES THE FOLLOW UP ON THE RELEASES SINCE THEY PAID OFF THE LOANS) and handling any required IRS reporting.
File Maintenance - By law all closed involving California Real Estate must be maintained for six years, ours are backed up electronically for safety.
