“How does the escrow process in California work?” This is a question every California resident asks when they are selling or buying a home for the first time. It is too easy to get lost in the jargon and the mountain of legal terminology associated with the escrow process.
However, the main piece of information you should know is that escrow is essentially the closing process, and California escrow law requires you to hire an escrow agent to act as a neutral middleman between buyer and seller.
First Steps – Escrow Begins
Escrow officially begins after a Seller has accepted a purchase offer from an interested Buyer, both parties have signed the Purchase Agreement, and a copy of the signed Purchase Agreement has been provided to the Escrow Officer. The escrow agent will then begin collecting any necessary information regarding the property (i.e., ordering the Title Report, requesting mortgage payoff statements, etc.) to make sure the sale of the property is completed properly and legally.
Earnest Money Deposit (“EMD”)
After signing the purchase agreement, the Buyer will usually send a down payment (deposit) to the Escrow Agent in order to show good faith that the Buyer is serious about purchasing the house. The Escrow Agent will then send any necessary documents to the seller and request the seller to fill out the required forms and return them back to the Escrow office.
Property Investigations, Inspections, and Inquiries
During the escrow waiting period, buyers may due their “due diligence” which means researching the condition of the property and possibly completing an interior inspection. Buyers may sometimes choose to visit the property to physically appraise it or send contractors to professionally inspect the plumbing, electricity, structure, pest problems, or other potential issues.
Passing of Title
Before those last steps to close, a title company must run a title report and ensure that the seller can provide a clear title for the property to the new homebuyer. If the title is not free and clear, there may be a holdup in the closing process until the title Issue is resolved.
Final Steps – Deed Recording and Escrow Closed
After all documents have been signed, notarized, sealed, and delivered to their respective locations, the buyer will sometimes perform a final walk-through of the home to make sure everything meets their expectations. At this time, all the funds are sent to the escrow company, usually by wire, and the deed recording can be scheduled.
The final step in the California escrow closing process occurs when the Grand Deed is recorded and stamped at the County Hall of Records. This final step officially transfers property ownership from the seller to the home buyer. After the Escrow Agent receives confirmation of a successful county recording, the Escrow Agent will quickly pay the seller any and all money owed. Now that the seller has been paid, it is officially time to celebrate!! Woohoo!!!
When Tropical Homebuyers buys your home in California for cash, you will not pay any escrow fees, commissions, or marketing fees – absolutely nothing. Your property will be inspected only once, and there will be NO annoying “open houses” to deal with. If you are ready to say goodbye to the stressful and complicated selling procedures used by traditional Realtors, call us at (323) 580-6881. Our friendly team of real estate investors are ready to buy your California property FAST for cash without the stress.