Surviving Escrow — A Guide for First Time Homebuyers
Your offer has been accepted — now what? Here’s a bit of what happens before you get the keys.
What is Escrow?
An escrow company is a neutral third party who holds and distributes all of the funds of the transaction. When you’re “in escrow,” that means that your offer has been accepted and all parties are satisfying the necessary legal, financial, and logistical requirements necessary before you officially become the owner of the property, at closing.
The length of escrow can vary and is determined by you and your agent when the offer is being written up. If you need a loan to buy a home, you can expect that escrow will likely be at least 30 days or more.
Who is Involved?
In addition to you & your agent, the other parties include the listing agent & seller, your lender, inspectors, & the escrow/title company.
The Inspection Period
Once your offer is accepted, the inspection period begins. This is your opportunity to have general and specific inspections, and to look into anything you care about such as neighborhood information or school rankings. Also known as the "due diligence" period, this is when you'll research everything about the house that you can, and figure out what repairs you'll request, if any.
In addition to a general inspection, you may also want to schedule the following:
termite
sewer scope
roof
mold
pool
hvac
Other Moving Pieces
While you’re working with your agent to get necessary documents signed, you'll also be in contact with your lender and the title company.
Title Companies
Although often referenced interchangeably, title and escrow companies are not always the same entity. A title company issues title insurance to buyer's and lender's, which protects you from acquiring a faulty title, while an escrow company manages the escrow account. And while they can be separate, it is common that your escrow company actually doubles as a title agency.
Mortgage Officer / Lender
During escrow your lender will be working with you to make sure your loan is approved. Your mortgage loan officer is essentially the party between you and an underwriter. It's the underwriter's job to process your application, verify your information is accurate, and guarantee that you'll be able to pay back the loan. During this time it's vitally important that you make no major purchases and even avoid depositing any large checks! Be sure to keep your lender and agent in the loop on anything that may impact your ability to close on the house.
Before Closing
A few days prior to closing you'll do a final walkthrough with your agent to make sure everything is in the same condition as when you put your offer in on the house, and that any agreed upon repairs were completed. In the days leading up to closing you'll also sign all of your closing documents — including your loan agreement — as well as wire your downpayment to the escrow company. Once the deed records with the county on the day of closing, the house is yours!
Want to get your new home journey started? Check out these homes available in the Tucson area.
Julia Van Valkenburg, REALTOR
OMNI Homes International
julia@buyselltucsonhomes.com
520-275-3514
