Road Map to the Escrow Process
Purchase and Sale Agreement is the first stop on the road.
The primary reason to create an escrow in a real property transaction, contracted by a Purchase and Sale Agreement, is to provide a mechanism for the orderly delivery of the necessary documents and disbursements of the funds while protecting each party from the other.
Preliminary Title Report is the second stop.
The “Prelim” tells the escrow officer the condition of the title to the property, i.e., Property Taxes, Mortgages and Deeds of Trust, Liens, Judgments, Easements, etc.
Lender Closing Instructions is the next stop.
The Lender’s Closing Instructions set forth the conditions under which the lender will fund the loan. Closing instructions could be from fifteen pages to over thirty pages in length and must be read in its entirety by the closing officer.
Closing, the last stop.
Once the purchase loan is funded and all conditions have been met, the title transfer papers are sent to the County Clerk’s office for recording, and the funds are disbursed to the proper parties. Once Escrow receives the recording number from the County showing the transfer of title, the transaction is “Closed.” Break out the champagne!