Escrow Process Overview
The Escrow Process Starts With An Accepted Purchase Offer And Ends With Escrow Closing
In Arizona the escrow process starts when a purchase contract between the seller and the buyer is finalized. Upon acceptance of the purchase offer the buyers Realtor will “open” escrow and deliver the buyers “earnest money” to an escrow officer.
The escrow officer will open the escrow account that will be used to receive and disperse all monies for the transaction. The escrow company or title company managing the escrow process follows the terms and conditions set in the purchase contract.
The Arizona Offer To Purchase Residential Real Estate set out various of terms and conditions. These terms and conditions establish what needs to be done by whom and by when through out the escrow process. For example:
Arizona purchase contracts establish that the buyer must obtain financing pre approval within a specified number of days of contract acceptance. A lender will need to collect information from the buyer and prepare a form stating the buyer is pre-qualified. This form is frequently submitted as part of the purchase contract. Within 5 days of acceptance the buyer must submit requested documents to the lender of start their mortgage qualification process.
In Arizona a home inspection is a standard event in the purchase process. The buyer will need to schedule an inspector, have the inspection completed and report prepared within 10 calendar days after contract acceptance.
Lenders require the buyer and the property meet various conditions before granting a loan. They will want to receive a preliminary title policy, title insurance to protect the lender against title errors, termite inspections and an appraisal to assure that the home has sufficient value to secure the loan
The buyers Realtor will typically arranges required inspections. The sellers Realtor will normally be on-site during the inspection.
How long does it take to close the escrow process?
Here again the Arizona purchase contract requires a close of escrow date be specified. It can be change should circumstances require it. However, both parties must agree to any change in writhing.
Today’s mortgage process will typically take 5 to 7 weeks. Accordingly, the seller should have ample time to be packed and ready to move on or before the close of escrow date.
Closing or “closing escrow” as it is known in Arizona is the recordation of all transaction documents with the responsible county office. In almost all cases this is done by the escrow company electronically.
Both the buyer and seller will have met with the escrow officer to execute the documents required to transfer the home to the buyer and execute all mortgage loan documents. Upon execution the loan documents are sent to the lender for review. When all documents are complete the lender will fund the loan at the escrow company.
The escrow closing officer will review the sale agreement and determine what payments and credits the owner should receive and what amounts are due from the buyer. The closing agent also assures that certain transaction costs are paid (taxes and title searches).
When everything is complete, the sale is recorded at the Pima County Recorders Office. This is actually done electronically.
Needless to say, the process outlined above is a summary of the key events and steps in the escrow process. Realtors for the seller and buyer will be involved through out the entire escrow process.
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