After searching for weeks you’ve finally found the perfect place to call home. You submitted your offer with your agent and it was accepted congratulations! Now, what happens? Be prepared for an average of 30 days of signatures, paperwork and phone calls. Everything is on a timeline deadline and it is extremely important to have all your paperwork in order for an escrow to close smoothly and not have you stressed out.

Here is what to expect during the escrow process from open to close.

Day 1 to 3:
– Agent orders all inspections and NHD (Natural Hazards Disclosure) to meet inspection contingency on Day 3
– Escrow starts on opening package
– Lender confirms loan amount, program with client
-Lender locks loan and issues loan disclosures

Escrow Draft
– Escrow instructions are prepared for approval, this happens within 24 hours of your offer acceptance
– Once the instructions are approved, opening packages are sent to the buyer, seller, and lender
– A loan estimate sheet will be provided as well as estimated fees sheet so that both buyer and seller are aware of what to expect

Escrow Instructions Example:

Day 4 to 21
From Underwriting to Processing
– The loan officer submits your file to processing/underwriting
– Your lender orders the appraisal for the home (The bank must verify that the home is valued at what you are offering)
– The underwriter reviews your file and issues approval with conditions
– The processor orders verifications of your documents
– The Processor orders the condo documents (Only required if purchasing a condominium)

Reports are ordered
– A preliminary (Prelim) title report is ordered
– A title report will show any encumbrances, utility easements, or easements on a property
– Escrow can not close if encumbrances on a title report by seller have not been cleared
– A Natural Hazards Disclosure (NHD) report is ordered
– In California, this report is important to the buyer. It shows if the home lies on any earthquake fault                   lines, flood zones, or other natural hazards

Day 14 – Appraisal Contingency to be Removed
Loan Contingency Preparation
– Client provides file conditions
– Underwriter reviews client’s final documents, all reports and verifications
– Underwriter issues Clear to Close (C2C) – Basically saying loan has been approved
– Closer prepares Closing Disclosure

Closing Disclosure Example:

Day 21 – Loan Contingency to be Removed

Day 22 to 30
Closing Process

– Closing Disclosure goes through a 3-day waiting period, buyer must review and approve the Closing Disclosure within 3 days, the sooner the better.
– Loan Documents are issued to escrow for signing with notary agent
– Loan Documents are signed and returned to lender

Loan Funds
– Title is recorded

Recording/Closing
– The Grant Deed and Deed of Trust are sent to title
– Property Title is sent to County Recorder’s Office for recording
– Title provides confirmation that documents have been recorded and ownership of real estate property is officially transferred
– Escrow advises Agents of recording, prepares Closing Packages, and wires the Seller’s proceeds from sale of home

Final Closing Package
– Final Closing Statement is issued
– 1099-S Form is issued – This is used to report the sale or exchange of Real Estate
– Evidence of Title Insurance is issued
– Home Warranty Confirmation is issued
– Copies of Loan Documents are issued

Day 30 – Close of Escrow
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Congratulations! After 30 days of filling out paperwork and getting signatures, you receive the keys to your new home and the home is now yours!

For questions about the escrow process feel free to reach out and I can answer any questions you may have. If you are interested in getting preapproved with a lender, visit our Financing page or click here.

Ashraf Spahi is a Real Estate professional specializing in Los Angeles Real Estate. This post is brought to you in collaboration with Samantha Scherr of Movement Mortgage and Rhoni Taylor of Silicon Beach Escrow.