Finance : Escrow: Closing and Another Consideration

8/6/2019 Finance : Escrow: Closing and Another Consideration

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Closing and anotherClosing and another

considerationconsideration

Prepared byPrepared by

Mr. X, Y & ZMr. X, Y & Z


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The Closing ProcessThe Closing Process

Opening EscrowOpening Escrow

Removing ContingenciesRemoving Contingencies

Obtaining Title Insurance andObtaining Title Insurance andTitle ReportTitle Report


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Opening EscrowOpening Escrow

How to Open EscrowHow to Open Escrow

Finding an Escrow HolderFinding an Escrow Holder

Cost of EscrowCost of Escrow


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Removing ContingenciesRemoving Contingencies

Inspection ContingenciesInspection Contingencies

Negotiating Cost of RepairsNegotiating Cost of Repairs

Removing InspectionRemoving InspectionContingenciesContingencies

Financing ContingenciesFinancing Contingencies


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Obtaining Title Insurance andObtaining Title Insurance and

Title ReportTitle Report

Function of title insuranceFunction of title insurance

Financial institution requirementsFinancial institution requirements

Problems that arise with the titleProblems that arise with the title


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Function of Title InsuranceFunction of Title Insurance

To secure both the seller or the buyerTo secure both the seller or the buyer

against unknown clouds on the legal title ofagainst unknown clouds on the legal title of

the propertythe propertyE.g.E.g.

Against an unrecorded deedAgainst an unrecorded deed

Against a forged deedAgainst a forged deed

Against an unrecorded easementAgainst an unrecorded easement


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Financial InstitutionFinancial Institution

RequirementsRequirements

Preliminary /Prelim /Pre Title ReportPreliminary /Prelim /Pre Title Report Ordered after the buyer and the seller signed theOrdered after the buyer and the seller signed the

house purchase contracthouse purchase contract

BuyerBuyers offer should be considered as a approval of as offer should be considered as a approval of apreliminary title reportpreliminary title report

It should be completed earlier in escrow process toIt should be completed earlier in escrow process toanticipate any problemsanticipate any problems

Contingency ReportContingency Report A statement that summarize the current condition ofA statement that summarize the current condition of

the title of the property.the title of the property. Including liens, encumbrances, covenants, conditions,Including liens, encumbrances, covenants, conditions,

and restrictions (CC&Rs), and easements.and restrictions (CC&Rs), and easements.


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Financial InstitutionFinancial Institution

RequirementsRequirements

California Land Title AssociationCalifornia Land Title Association

(CLTA) Report(CLTA) Report Covers items in the public recordsCovers items in the public records

Mortgage liens, trust deed liens, judgment liensMortgage liens, trust deed liens, judgment liens

American Land Title Association (ALTA)American Land Title Association (ALTA)

ReportReport More extensive than CLTA, since it covers both publicMore extensive than CLTA, since it covers both public

records, and by physically inspecting the propertyrecords, and by physically inspecting the property

Discuss how much they cover, and whom they benefitDiscuss how much they cover, and whom they benefit


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Problems That Arise with The TitleProblems That Arise with The Title

Esta

blishment Process

Esta

blishment Process

Refuse to go through with the transactionRefuse to go through with the transaction

Give seller an extension to solve the problemsGive seller an extension to solve the problems

Buy the house with less than perfect titleBuy the house with less than perfect title


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Closing EscrowClosing Escrow

The process of closing escrowThe process of closing escrow

Required paperworkRequired paperwork


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The Process of Closing EscrowThe Process of Closing Escrow

Completed 4 days before closing processCompleted 4 days before closing process

To avoid any kind of delaysTo avoid any kind of delays

Completed paperwork, cleared down payment, andCompleted paperwork, cleared down payment, and

the loan proceeds, the escrow officer will preparethe loan proceeds, the escrow officer will preparenew deed that named the new ownernew deed that named the new owner

New deed transferred to the County RecorderNew deed transferred to the County Recorderss

OfficeOffice

Then, the seller will receive its payment at the endThen, the seller will receive its payment at the end

of the dayof the day


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Required Paperwork for ClosingRequired Paperwork for Closing

EscrowEscrow

Final escrow instructionFinal escrow instruction Copy of preliminary reportCopy of preliminary report

Deed of trust from the lenderDeed of trust from the lender

Copies of structural pest control and otherCopies of structural pest control and otherinspection reportsinspection reports

Foreign Investment in Real Property TaxA

ctForeign Investment in Real Property TaxA

ct(FIRPTA) statement(FIRPTA) statement

Fund disbursement provided by the lenderFund disbursement provided by the lender

Any previous rental agreementsAny previous rental agreements

Settlement statement that listed all costs preparedSettlement statement that listed all costs preparedby escrow holderby escrow holder

Statement authorizing an impound accountStatement authorizing an impound account

Perjury statementPerjury statement

Statement that shows the hazard insuranceStatement that shows the hazard insurancecoveragecoverage


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Other ConsiderationsOther Considerations

Check out a houseCheck out a houses conditions condition

1.1. Common Disclosure StatementsCommon Disclosure Statements

2.2. Real Estate Transfer DisclosureReal Estate Transfer Disclosure

StatementStatement

3.3. Natural Hazard DisclosureNatural Hazard Disclosure

StatementStatement

4.4. Disclosure of Deaths and or/AIDSDisclosure of Deaths and or/AIDS5.5. Disclosure of Military OrdnanceDisclosure of Military Ordnance


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Final Home InspectionFinal Home Inspection

American Society of HomeAmerican Society of Home

InspectorsInspectors


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Home WarrantyHome Warranty

What is it?What is it?

FunctionsFunctions

BenefitsBenefits


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ClosingClosing

Finance : Escrow: Closing and Another Consideration

Documents

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