Seller Escrow Steps
You’re in Escrow, Now What?
Here are the basic steps of escrow:
- Good Faith Deposit— The deposit – typically 3% of the purchase price – is due within 3 days of opening escrow. The deposit is refundable, if your buyer properly exercises their contingencies.
- Inspections– Unless otherwise negotiated, the buyer typically has 7-10 days to inspect the property. Start with a general home inspection, and let the home inspector let you know if he recommends other inspections. Common additional inspections include roof, electrical and foundation inspections. You may receive a Request for Repairs. It is then common for the buyer to come back and ask for credits or repairs, based off items that were found in the inspection. We will help you go through the items to verify they are legitimate, and that the costs requested to fix are also legitimate. We will cross check with our vendors for their costs on these items to ensure legitimacy. The process may then include some negotiating back and forth. We will give them a counter offer, and subsequent counters may follow. The goal is ultimately to keep the buyer satisfied (while of course saving you, the seller, as much money as possible) in exchange for them removing their contingencies – as that brings us closer to completing the sale.
- Loan– The loan process runs concurrent with the entire escrow. We handle coordinating the loan with the buyer, lender and escrow.
- Appraisal– The lender will order the appraisal at the outset of escrow, and we’ll make sure to make sure the appraiser gets in to the property. We send our own appraiser to help justify the value for the lender’s appraiser.
- Retrofit– If applicable, we have a 3rd party company come to the house and insure that the property meets the minimum safety standards as dictated by the city. The repairs are made prior to the close of escrow, and you are handed a certification for your records.
- Disclosures– You must provide the buyer with disclosures for the property based on what you know about the property that could be a material defect that affects the value of the home. There are two separate types of documents included with the seller disclosures. The first are seller entry documents. That means you, as the seller, need to spend a little time carefully looking through these and filling out what you know about your property. It is important to be thorough and answer the questions honestly. This protects you from any problems later on. Included in the seller entry documents, are the Transfer Disclosure Statement (TDS), Seller Property Questionnaire (SPQ), and some other earthquake and safety retrofitting documents. The second set includes generalized disclosures that would apply to any property. You initial to indicate that you received it and are providing it to the buyer. While paperwork can be tedious, don’t forget that it’s important because it’s there to protect you. Your Tomea Real Estate Agent is here to help you!
- HOA– If you’re selling a PUD, condo, or house with an HOA (Homeowners’ Association), we help the HOA provide disclosure about the condition of the HOA, including meeting minutes, financial statement, and any other internal documents. You are required to disclose anything you know about the HOA.
- Termite Inspection– Typically the seller arranges for and pays for a 3rd party company to inspect the property for termites, and provide a clearance for you, and for the lender. Typically the seller covers “Section 1” termite work, which is actively infested areas of the property. Most homes in Southern California have a good amount of termite work to be done.
- Loan Docs– A few days before the close of escrow, the buyer will get loan documents from the lender. Escrow will arrange a time to sign at your convenience. Once the buyer signs, they are handed information on wiring the balance of the down payment and closing costs to escrow. Typically the loan funds 1-2 business days after signing, and you record escrow the next business day at 5pm.
- Keys– At 5pm on the day of close of escrow, you turn over keys and access to the property. Your money is sent to you in the manner arranged with escrow.