A lot has to happen between the time your offer is accepted and the time you get to pick up your keys and move into your new home. This period is called “escrow,” and it typically takes around 30-45 days in California.
If you have a professional real estate agent representing you (which you absolutely should; the seller pays all real estate fees, so it costs you nothing to hire a real estate agent), your agent will coordinate with other industry insiders to handle several tasks behind the scenes. These include:
Opening escrow with an escrow officer,
Arranging to have a title company confirm that the title to the property is clear of potential ownership discrepancies, and
Collecting relevant disclosures from the sellers.
While your agent is working on that, they’ll also help you complete the critical tasks that require your direct attention. Here is your homebuyer’s escrow checklist.
Pay Your Earnest Money
Earnest money is the small deposit you pay into the escrow company as soon as your agent opens escrow on your accepted offer. This money shows the seller that you are serious about completing the purchase.
Order Your Inspection
The home inspection should be ordered as soon as possible. It’s highly unlikely that the inspection will uncover any deal-breaking issues, but you want to know the condition of the property early in the deal just in case any serious issues require renegotiation.
Work With Your Lender to Secure Your Loan
If you’re getting a home loan, you’ll be working with your lender through the entire escrow period. Initially, you’ll need to provide your financial records to confirm eligibility for the loan. Even though you were pre-approved before starting your home search, the lender needs to make sure that your financial situation has not changed. Then, the lender will continue checking on you every week to:
Make sure you’re still employed,
Confirm that you don’t have any new debts,
Make sure you don’t suddenly have a large expense or deposit that changes your financial picture.
Review the Appraisal
The appraisal is used to confirm the value of your new home. This is especially important if you’re getting a loan because the lender needs to know that the house is worth at least the amount that they are lending. In most cases, the appraisal comes in with a value at or above the agreed-upon price. But once in a while, the appraisal comes in low. In that case, we need to decide if it’s worth paying the difference out of pocket or if we need to reopen negotiations.
Complete a Final Walk-Through
Before signing the final closing docs, you’ll have a chance to walk through the new home one more time to make sure it’s in the condition you expect. This gives you the opportunity to make sure that specific fixtures, appliances, and furniture that were included in the deal are all present and that no additional damage was done to the home as the previous owner moved out.
Sign a Small Mountain of Paperwork
To be clear, you’ll be signing paperwork all escrow long. In the beginning, you’ll get a flurry of disclosures from the seller to let you know about any potential issues the sellers are aware of. Then you’ll get a document here and there as we progress through the inspection and title search processes. But the mountain of paperwork comes toward the end when you sign your loan docs. Ask your lender for a copy of the docs several days before your signing appointment so you have time to review them before you sit down with the notary to sign.
Wire Your Closing Costs
When all your i’s are dotted and t’s are crossed, it’s time to wire your closing costs to the escrow company. Make sure you confirm the wire instructions directly with your escrow officer. And give yourself a few days to make sure the funds transfer on time so the closing doesn’t get delayed.
Oh, and don’t forget to pack and arrange movers while all of this is going on!
Don’t worry if this homebuyer’s escrow checklist feels a little overwhelming; your real estate agent will guide you through each step. They’ll let you know exactly what’s needed and when.
If you don’t already have an agent, contact Sequoia Real Estate for an organized real estate professional to make the escrow process as smooth as possible for you!