The Life of an Escrow

During a real estate transaction it is vital to have a great Escrow team. Many of my clients have asked me what role escrow plays in the process of buying a home. The answer I give them is always, "only the most important role." A great escrow team is never noticed by the buyer and seller. The technical definition of escrow is:

"…an impartial third party in which documents and funds are deposited by buyers, sellers and lenders to facilitate the closing for a real estate transaction."

It's the job of escrow to coordinate with the buyer, seller and lenders to obtain required signatures on all documents a work with title to clear al liens and encumbrances against the property then record the comments with the county to close the transaction. To better explain exactly how this happens let's look at the life of an escrow:

1. Receive & Review Purchase & Sale
2. Order Title Insurance
3. Receive & Review Title Commitment
4. Send copy of title commitment to agents for buyer and sellers review.
5. Send introduction packet to seller and buyer.
6. Buyer orders fire and hazard insurer and sends info to escrow
7. Request Pay-off figures from Underlying lenders
8. Work with appropriate parties to clear any unacceptable "clouds" on title
9. Coordinate with lender to ensure timely delivery of loan funding.
10. Receive & Review Loan Documents
11. Prepare Settlement Statements
12. Prepare Escrow instruction & pertinent documents, including the Deed.
13. Obtain Signatures from sellers
14. Obtain closing funds from buyers
15. Obtain signatures from buyers
16. Prepare recording instructions
17. Send all documents for lender review
18. After review send all documents to courthouse for recording
19. Call Lender with Recording Numbers
20. Receive Loan Funds
21. Disburse Funds to Seller
22. Forward Final Docs to Sellers, Buyers & Lender

So there you have it. After looking at this list I am even more certain that a good escrow company and escrow officer is worth fighting for it in negotiations. There are many choices when it comes to Escrow companies. In some cases, especially when dealing with bank owned properties, where you don't get to choose your escrow closer. For me I have a few escrow companies that I don't mind working with. My first choice is Linda Charleston at Davidson, Czeisler & Kilpatric, I also like Talon NW & Northpoint.

Closing thought: To ensure you have the best home buying experience, take time to pick your closing team and it will take make all the difference.