Arizona Escrow Process Simplified
The escrow company is a neutral third-party that holds all the funds until each and every contract conditions are fulfilled. They administer the real estate process, all the way from initial deposit to final funding. All parties involved are protected. Escrow process makes sure that no funds or properties change hands until all conditions in the agreement have been met.
Typically, it’s the seller who selects the escrow company. However, if the buyer prefers a different escrow company, he or she can request that in the offer..
The buyer’s agent delivers a signed Residential Purchase Contract to escrow company. Earnest money is either paid by check or sent electronically and is payable to the title company.
The escrow officer will open the escrow and will send out an earnest money receipt to the listing agent, buyer’s agent, and also to the lender. The escrow officer will send out opening packages to the buyer and seller. The opening packages include a request for contact information, seller’s loan pay-off information, completion of an identity statement, etc.
Next, the escrow officer will order the title commitment and the HOA information such as the transfer fees and other disclosures. The HOA information, financials, and CC&R’s (covenants, codes, and restrictions) are delivered to the buyer.
Escrow (settlement)
Once the property records have been scrutinized to confirm the clean title, the title commitment will be dispensed. If there are certain things that need to be cleared up before title insurance is issued, those will be listed in the title commitment. The escrow officer will work with all parties to satisfy all requirements on the title commitment.
If the buyer is obtaining a loan, the lender will send instructions to the escrow officer and once the lender’s loan documents are received, the escrow officer will prepare the Closing Disclosure. This disclosure contains lists all the debits and credits for the purchase/sale and the lender must approve the settlement statement before the buyer can sign.
Once the buyer signs the loan/escrow documents, the loan package will be sent back to the lender for review. If all looks good, the lender will wire funds to the title company. The buyer’s funds are typically delivered electronically or by cashier’s check the day before closing.
Closing documents are typically signed several days prior to closing and in most cases, buyers and sellers have separate signing appointments with the escrow company. Once both parties sign, the escrow company looks for any last-minute liens on the property. A lien is a claim upon a part of one’s property that arises because of an unpaid debt related to that property.
If the buyer is obtaining a loan, the lender will send instructions to the escrow officer and once the lender’s loan documents are received, the escrow officer will prepare the Closing Disclosure. This disclosure contains lists all the debits and credits for the purchase/sale and the lender must approve the settlement statement before the buyer can sign.
