You are now on your way to acquire a home. The escrow period opens when signed agreements are given to an escrow officer, who will help ensure that the conditions of the contract and any escrow instructions are satisfied. Escrow closes when all conditions have been met and the property ownership is transferred to the buyer.
The earnest money deposit provided by the buyer will go to the escrow instead of the seller. This is because if the seller holds the deposit, he/she could use it as a hostage during the negotiation.
By putting it in escrow, it serves as a safeguard to both parties just in case the deal falls through and they can’t reach a final purchase and sale agreement.
Make sure that there are sufficient funds in your account to cover this check.
The deposit check will be cashed. Assuming the sale goes through, this money will be applied to the purchase price of the home. If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back, less standard cancellation fees.
The length of a closing is determined by the terms of the purchase agreement and can range from a few days to several months. On average, it takes 30 to 45 days. The closing officer takes instructions based on the terms of your purchase agreement and your lender’s requirements. By the time you have opened escrow, you have come to an agreement with the seller on the closing date and the contingencies. Each contract is different, but most include the following:
- Inspection contingency: this should be completed as soon as possible after the contract to purchase is signed . If the result of the inspection does not satisfy you you may want to cancel the contract.
- Loan contingency: Once the contract is signed, you have a period of time to secure funding. If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and take your chances on getting a loan. You may choose to cancel the purchase contract.
- Title contingency: Seller must provide a marketable title of title. This concept refers to ownership of real estate. Under law, titles are evidence of ownership. Selling real estate (land and the property attached to it) involves transferring its title. A marketable title is one that can be transferred to a new owner without the likelihood that claims will be made on it by another party. The concept is crucial in all real estate transactions because buyers generally expect to receive property to which no one else can lay claim.
- Homeowner's contingency: You absolutely must have this to obtain a mortgage. The “dwelling coverage” portion of your hazard insurance covers costs to completely rebuild your home, while the “liability coverage” protects you against accidents that occur on your property. “Personal Property Coverage” pays to replace your possessions and generally totals 50 to 75 percent of the dwelling coverage amount. Flood and earthquake insurance policies also are available and are recommended if you are in high-risk areas.
It would be in your best interest to apply for insurance as soon as possible after the contract is signed.
- Transfer all utilities into your name prior to closing
- Schedule the final walk-through inspection: Prior to your closing-day appointment, if provided in your Purchase Agreement, you will have the chance to perform, with your agent, a walk-through. This will likely be the first opportunity to examine the house without furniture, giving you a clear view of everything. Check the walls and ceilings carefully, as well as the results of any work the seller has agreed to do in response to the inspection’s findings. Any problems discovered previously that you find uncorrected which the seller agreed to correct, should be brought up prior to closing.
Congratulations you're the proud owner of a new house. Once you get settled into your new house, there are a handful of tasks that you should consider completing. Below are some of the best post-closing tasks to think about.
1. Change the locks
2. Change address with United States Postal Service
3. Inform employers, schools, and other important establishments
of your new address
4. Meet The Neighbors