ESCROW PROCESS 6.1 Escrow. Escrow is a neutral depository for funds and documents needed to complete a real estate transaction. It is a process that begins when your purchase offer is accepted by the seller and ends when you become the registered owner of the property. The escrow process is as follows: A copy of the existing deed is ordered by the escrow officer to obtain the legal description of the property and the names of the recorded owners. A preliminary title report is ordered, which is a search of public records, laws and court decisions pertaining to the property determining any recorded liens or encumbrances or any other matters of record that could affect the title to the property. The escrow officer orders the statements of payoffs, Homeowner's Association fees, taxes, etc. that are needed to prepare the settlement statement. Upon receipt of the buyer's loan documents, the escrow officer completes the settlement statement (or HUD) based on the information provided by the purchase contract. The buyer and seller are contacted separately to schedule signing appointments. The buyer will deposit their closing funds at the scheduled signing time unless other arrangements were previously made. After the signing, the loan documents are returned to the buyer's lender for approval and funding. Upon receipt of the loan proceeds from the lender, the escrow officer will release the documents in the transaction for recording with the County Recorder on the recording date. After recording, the funds are disbursed and copies of all documents are provided to the buyers, sellers and REALTORS® and the title insurance policies are issued to the buyer and the buyer's lender within 30 days. 6.2 Understanding Title Commitment. The title report or commitment lists documents that are exceptions to the title insurance (Schedule B Exceptions). Schedule B Exceptions may include encumbrances, easements, and liens against the property, some of which may affect the use of the property. The title report or commitment will be provided to the buyer by the title company and should be reviewed completely. Questions about the title commitment and Schedule B documents may be answered by the title or escrow officer. 6.3 The Title Insurance Policy. The title insurance policy will be issued as of the close of escrow. Title insurance does not insure that a title defect will not occur; it insures that if a defect that occurred prior to the policy date becomes apparent, the buyer will be indemnified if the defect cannot be cured. A standard policy generally insures against the title to the property being vested other than stated in the policy, any defect in or lien or encumbrance on the title, unmarketability of title and lack of a right of legal (not necessarily physical) access. The American Land Title Association (ALTA) Homeowner's Title Insurance Policy provides coverage for additional defects. The policy generally contains the same sections as the Title Commitment. For more information or if you have any questions, please contact Garry and Mary at any time.