Tip of the Month - December 2006

Escrow 101 - Opening Escrow

Actions you can take to quick start the opening process

During the earliest days of the escrow process, there are actions both Buyers and Sellers can take to ensure the transaction gets off to a smooth start. This month, we provide some simple, effective tips which can really make a difference.

Tips for Both Parties:

• When you receive your escrow instructions, read and understand them. Make certain they match the terms of your Purchase Contract, and call your escrow officer or real estate agent if you have questions. Promptly sign and return the instructions and other forms provided by your escrow officer. Visit the Buyer and Seller Escrow Tutorial on our website at http://www.heritageescrow.com/escrow_checklist.html for checklists and explanations of documents and forms.
  
• Tell your escrow officer if you plan to be out of town during the escrow period or if one party will be signing documents using a Power of Attorney.
  
• Let your escrow officer know if the escrow is part of a 1031 tax-deferred exchange and provide the name of the Qualified Intermediary, if any.
  
• Be responsive to the requests of your agent, lender and escrow officer. Remember, they are working together to close your escrow smoothly and on time.

Special Tips Just for Sellers:

• Talk to your escrow officer if you are in the process of divorce, if a spouse has recently died, or if you have specific instructions covering the disbursement of your proceeds, such as a wire transfer.
  
• Remember to keep the payments on your existing loans current during escrow. On our website at http://www.heritageescrow.com/tip.html, see our Tip of the Month for October 2005, for in-depth information about this important requirement. Regarding property taxes, talk to your escrow officer if a payment becomes due during your escrow period. He or she can give you advice about ways to avoid double payments or "holds" on your funds at closing.
  
• Tell your escrow officer if you are involved in negotiations with your existing lenders (for example, delinquency issues) or legal or estate proceedings which might affect the property, such as a probate sale.
  
• Be sure inspections or repairs are ordered quickly. Coordinate this process with your agent and plan to make your property readily available for inspectors or appraisers which may be requested by the Buyer or his agent.

Special Tips Just for Buyers:

• Provide the name of your new lender to your escrow officer as soon as possible and cooperate with the lender by promptly providing requested information. Obtaining loan approval is usually the most time-consuming part of the escrow process, so early attention to this will be helpful.
  
• If fire insurance for your new property is not provided by the homeowner's association, contact your insurance agent and provide that agent's name and phone number to your escrow officer.
  
• Advise your escrow officer if your closing funds are coming from a stockbroker or another country.
  
• If you will be unable to sign loan documents during normal business hours or if you require the services of a translator, your escrow officer will appreciate knowing this in advance.

These tips will help you avoid unexpected surprises that can cause a delay in your escrow closing. Your escrow officer is an excellent resource if you have questions or concerns, and you are encouraged to call any time.

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