Page 6 - California Home Sellers Handbook

02 Escrow & Closing

Opening The Escrow
After the buyer and seller agree to terms of a sale, the transaction goes into escrow,
which can take several weeks (30-45 days or more) to reach closing. Escrow can
be opened by the buyer or the seller’s real estate agent. The escrow agent and their
company act as a neutral third party for serving as custodian for funds and documents,
providing a clearing house for payment of demands and performing clerical details for the
closing.

What the Escrow Company Does
When the escrow is opened, an order for a preliminary report/commitment is placed with
the title company, which shows ownership of a parcel of land and recorded matters that
are relative to the property. Then a plan is set for the necessary action and documents
required, such as demands for satisfaction of liens, instructions for recording documents
and other requirements of the new lender. In most areas, buyers and sellers instructions
are prepared for signature from the information gathered.

Escrow Instructions and Your Closing
Your escrow officer or real estate agent will contact both the buyer and seller for an
appointment to sign escrow instructions and supporting documents.

Bring a legal form of identification with you, such as a current driver’s license, passport or
ID card (military or state). At this time you will normally be advised of the amount of money
you will need to deposit and/or receive depending on if you are the buyer or seller.
When the instructions from all parties have been executed, escrow is ready to close. At
that time all required funds have been receipted into escrow, the documents are recorded,
funds disbursed and the policy of the title insurance is issued.

If you are the buyer, you will be informed about the disbursement of keys by the real estate
agent or seller.

If you are the seller, upon receipt of the proper documentation and releases, the escrow
officer will disburse the reserved funds, including the seller’s payment.

As of October 3, 2015 the closing process has changed.
The Consumer Financial Protection Bureau (CFPB) created the TILA-RESPA Integrated
Disclosure (TRID) Rule to improve mortgage disclosure forms to make it easier for
consumers to understand the terms of their loans and closing costs. In order to ensure a
timely closing, it is more important than ever that you communicate with your lender, real
estate agent and escrow officer.

3