Tip of the Month - June 2008

Escrow 101 - The Seller's Opening Document Package

Escrow Documents Made Simple

Our tip for this month provides an explanation of the documents and forms which a Seller of residential property can expect to receive in his opening package. This package will be furnished by your escrow officer soon after your escrow is opened.

Supplemental Escrow Instructions

The escrow company's Supplemental Escrow Instructions are exactly what the name implies: they are additional instructions to the escrow holder. These extra instructions address matters which your escrow officer needs to manage during the escrow process even though they may not have been mentioned in your original purchase contract. Sometimes the Supplemental Escrow Instructions will re-state provisions in your contract which need clarification. The escrow company's General Provisions are also contained in the Supplemental Escrow Instructions. Together, the Supplemental Escrow Instructions and your purchase contract state all the agreements between the seller and buyer and provide your mutual instructions to your escrow officer.

Statement of Information

Your title insurance company will make a thorough search of the public records along with its process of examining the title to the property. The information you provide on the Statement of Information will be used to clear judgments and liens which do not directly affect you or the property. This information is confidential and will be used only to help the title company complete its work.

Property Information Statement

Use this form to provide information about any existing loans you may have on your property and to identify your homeowner's association for your escrow officer. Fully completing this statement will assist in the processing of your escrow.

Affidavit of Non-Foreign Status

Your signature on this affidavit certifies that you are a U. S. resident. Foreign persons, as defined by the Internal Revenue Service, are subject to federal tax withholding when they sell property. To learn more about how tax withholding may affect you, consult with your accountant, attorney, or the Internal Revenue Service. The website for the IRS is www.irs.gov.

1099-S Input Form

The information you supply on this form will be used by your escrow officer to produce IRS form 1099-S.

California Real Estate Withholding Forms 593-C and E

The State of California requires tax withholding for Sellers who do not meet residency requirements. Your answers to the questions on these forms will determine whether you are subject to withholding.

Grant Deed

This important document will transfer the title to your property to the Buyer on the day of closing. Be sure to sign it before a Notary Public and bring a current photo I.D. when you do so.

Special Documents

If the title to your property is not held in your name as an individual (such as in a trust or corporation) or there are unique conditions affecting your interest in the property, you may have some additional document requirements during the escrow process. Your escrow officer will advise you about these items.

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