Understanding the Closing Escrow Process

A sales contract is signed by the buyer and seller and delivered to the closing agent, usually along with a deposit check. The escrow process begins when the escrow agent accepts the deposit, often with a written notation on the contract. This agent then initiates the real estate closing process by opening a title order. The file starts to be processed, which includes ordering tax information, loan payoffs, surveys (if necessary), homeowner/maintenance fees, inspections/reports, and hazard and other insurances, as well as legal papers. Additionally, a title search examination is ordered to ensure there are no issues with the property title.

This is a search made of the public records related to the escrow process. Records searched include deeds, mortgages, paving assessments, liens, wills, divorce settlements, and other documents that affect title to the property. The title search examination involves reviewing the documents found during the title search that impact the property title. This step is crucial for verifying the legal owner and determining any debts owed against the property. Upon completion of the search and examination, a title commitment/preliminary report is prepared, reviewed, and then sent out to interested parties as part of the real estate closing process.

The closing agent reviews the new lender’s instructions and requirements as part of the escrow process, examines instructions from other parties involved in the real estate closing, conducts a title search examination, reviews legal and loan documents, assembles charges, prepares closing statements, and schedules the closing.

The escrow process involves an escrow or settlement agent who oversees the real estate closing of the transaction. During this process, the seller signs the deed and closing affidavit, while the buyer signs the new note and mortgage. The old loan is paid off, and all parties present, including the seller, real estate agents, attorneys, and others, are compensated. Additionally, a title search examination is typically conducted to ensure there are no unresolved issues before finalizing the closing.

After the signing has been completed, the escrow process moves forward as the escrow or settlement agent will forward payment to any prior lender and pay all parties who performed services in connection with your real estate closing (if they have not been paid). The transaction documents are recorded in the county where the property is located. Additionally, title insurance policies are prepared and sent to the new lender and to you. This all happens without any further actions required from the buyer or seller.