Life of a Real Estate Purchase and Sale Transaction

It all begins with the offer and acceptance skillfully negotiated by the Realtors representing Buyer and Seller

Buyer

• Submits a written offer to purchase (or accepts the Seller’s counter-offer accompanied by a good faith deposit amount.
• Applies for a new loan by submitting all required forms and often pays certain fees such as credit report and application costs.
• Approves the preliminary report and any property disclosure or inspection reports called for by the purchase and sale agreement, (Deposit Receipt).
• Approves and signs the escrow instructions, new loan documentation and other related instruments required to complete the transaction.
• Fulfills any conditions contained in the contract, lender instructions and/or the escrow instructions.
• Approves any final changes by signing amendments in the escrow instructions or contract.
• Deposits sufficient funds in the escrow to pay the remaining down payment and closing costs.

Lender

• Accepts the loan application and related documents from the Buyer and begins the qualification process.
• Orders and reviews the property appraisal, credit report, verification of employment, verification of deposits, preliminary report and other related information.
• Submits the entire package to the loan committee and /or underwriters for approval.
• When approved, loan conditions and title insurance requirements are established.
• Informs buyer of loan approval terms, commitment expiration date, and provides a good faith estimate of the closing costs.
• Deposits the new loan documents and instructions with the escrow holder for Buyer’s approval and signature.
• Reviews and approves the executed loan package and coordinates the loan funding with the escrow officer.

Escrow Officer

• Receives order for the title and escrow services.
• Accepts buyer’s earnest money deposit. Orders the title search and examination on the subject property from the title company.
• Acts as the impartial “Stakeholder” or depository, in a fiduciary capacity for all documents and monies required to complete the transaction per written instructions of the principals.
• With the authorization from the real estate agent or principal, orders demands on existing deeds of trust and liens or judgments, if any. For assumption of loan by Buyers, orders the beneficiary’s statement or formal assumption package.
• Reviews documents received in the escrow: preliminary report, payoff or assumption statements, new loan package and other related instruments.
• Reviews the conditions in the Lenders instructions, including the hazard and title insurance requirements.
• Prepares the escrow instructions and required documents, together with a preliminary estimate of settlement charges, for the Buyer and Seller, in accordance with the terms of the purchase and sale agreement.
• Presents the instructions, documents, statements, loan packages, estimated closing statements and other related documents to the principals for approval and signatures.
• Reviews the signed instructions and documents, returns the loan package and requests the lender’s funds.
• Determines when the transaction will be in the position to close and advises the parties.
• Assisted by title personnel, records the deed, deed of trust and other documents required to complete the transaction with the County Recorder and orders the title insurance policies.
• Closes the escrow by preparing the final statements, disbursing the proceeds to the Seller, paying off the existing encumbrances and other obligations. Delivers the appropriate statements, funds and remaining documents to the principals, agents and lenders.

Seller

• Submits documents and information to escrow holder, such as addresses of lien holders, tax receipts, equipment warranties, home warranty contracts, any leases and/or rental agreements.
• Orders inspections, receives clearances and approves final reports and/or repairs to the property as required by the terms of the purchase and sale agreement (Deposit Receipt).
• Approves and signs the escrow instructions, payoff demands, grant deed and other related documents required to complete the transactions.
• Approves and final changes by signing amendments to the escrow instructions or contract.
• Reviews documents received in the escrow: preliminary report, payoff or assumption statements, new loan package and other related instruments.
• Reviews the conditions in the lender’s instructions including the hazard and title insurance requirements.

Title Officer

• Examines the title to the real property and issues a preliminary report.
• Determines the requirements and documents needed to complete the transaction and advises the escrow officer and/or agents.
• Reviews and approves the signed documents, releases the order for title insurance prior to the closing date.
• When authorized by the escrow officer, the title officer records the signed documents with the County Recorder’s office and issues the title insurance policies.