Escrow: Now What?
Congratulations, you are on your way to owning your very own home! Follow these suggestions so that escrow and settlement with go as smooth as possible.
You will be asked for a down payment on the home you are purchasing. You can choose to put down as much or as little as you want (depending on your mortgage), but remember, the more you put down toward the total price of your home, the less time it will take you to pay off and the less your mortgage payments will be every month.
During this period of purchasing your home, you are going to need an escrow or settlement company to act as an independent third party so that you know when and who to give your money to get the deed to your new home. The escrow or title company will coordinate much of the activity that goes on during the escrow period. This earnest money may also be held by an escrow, title compnay,or in the broker's trust account. Make sure that there are sufficient funds in your account to cover this check.
The earnest money 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 money back, less standard cancellation fees. In certain instances, the seller may be able to retain this money as liquidated damages.
2. Financing 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 the contract is void.
3. A requirement that the seller must provide marketable title.
With an attorney or title officer, review the title report. The title must be "clear" to ensure that you do not have legal issues regarding your ownership.
The title compnay will check into local and state ordinances regarding property transfer and make sure that you and/or the seller have complied with them.
Secure homeowner's insurance. This will be required if you have a loan on the property, before you can close the sale. Your loan officer will most likely help you to get homeowner's insurance in place.
Contact local utility companies to schedule to have service turned on when you close escrow.
Schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. What you thought to be a "permanently attached" chandelier that would come with the property may have been removed by the seller and replaced with a different fixture entirely.
You've made it! Once the sale has closed, you're the proud owner of a new home. Congratulations!