Part II: So you learned the basics of buying a house and your offer just got accepted–cue fireworks and 12-piece band! Before you start scheduling the movers, there’s a little something called escrow standing between you and new house keys.
Before we can tackle escrow, it would help to know what that means. Escrow is just a company that serves as a neutral third-party that receives/disburses money, timelines and contractual agreements by the buyer and seller. An elevated, administrative assistant, if you will.
The term “opening escrow” simply means buyer and seller will begin fulfilling their contractual agreements to sell the house, usually within 30 days. Here’s a little cheat sheet for everything that happens after opening escrow.
Step 1: You’ve opened escrow! (Day 1)
The escrow officer will contact you to retrieve your good faith deposit–usually 3% of the accepted price.
Step 2: The calm before the paperwork storm (Day 1-7ish)
You’ll start getting lots of stuff to review and sign. The vast majority is just a transcription of the purchase contract.
Step 3: Disclosures: Is TDS contagious? (Day 1-7ish)
Sellers are required to disclose “material facts” about their property. This is done through a transfer disclosure, or TDS.
Step 4: Timelines, aka “Contingency Period” (Usually, 17 days or less)
Your awesome agent will keep track of timelines and schedule property inspections.
Step 5: Contingency #1: Inspection (17 days or less)
Depending on your contract, you have a set amount of time to do as many inspections as you want. The most common is a general home inspection.
Step 6: Contingency #2: Loan/Appraisal (17 days or less)
You also have a set time to ensure the house appraises and your loan is good to go.
Step 7: Contingency Removal (17 days or less)
You’re happy with the inspection and your lender just gave you the green light. Remove your contingencies because you’re closing!
Step 8: Final Walk-Through (Day 20-25ish)
Your loan documents have been ordered. If repairs were requested, confirm that it was completed by seeing the house again.
Step 9: Loan Docs (Day 25-27ish)
Wear comfy shoes, it’s a big stack.
Step 10: Funding and Recording (Day 29-30)
After receiving your signed documents, your lender will fund the loan. The home will record as rightfully yours the next day and you get keys.
Congrats! You’re a homeowner!