Info You Need ForEscrow purchases
What is Escrow?
The term Escrow is from the French word “escroue” which means a “scroll of writing”. Escrow companies are used in most Western States as settlement agencies, while in other parts of the country, the closing process is handled by title companies or lawyers.
Types of Escrow Holders
In the State of California, there are three main types of escrow holders that can be used, and each has its own regulatory agency.
Title Insurance Companies: In Northern California, the majority of escrows are handled through the escrow department of insurance companies. These companies are regulated by the Deparment of Insurance.
Independent Escrow Companies: These companies specialize in Escrow and only escrow, and therefore are held to the highest standards. They are regulated by the Department of Business Oversight (formerly the Department of Corporations), and are required to maintain a high level of liquid assets as well as hold a bond through the Escrow Agents’ Fidelity Corporation.
Real Estate Brokers: These escrow holders are affiliated with specific real estate companies and are audited and regulated by the Department of Real Estate. They may only handle escrows in which there is at least one agent on the transaction connected to their real estate affiliate.
Reasons For An Escrow
Escrow serves as a neutral depository or disinterested third party for money and documents.
Escrow holds a fiduciary role and MUST act completely impartial towards everyone involved in the transaction. By holding all money and documents, escrow acts as a form of consumer protection.
Escrow provides clear, concise accounting of all funds involved in the transfer process.
Escrow assures that all conditions will be met before the deed is recorded and money exchanged. Throughout the transaction, escrow is responsible for preparing and arranging for the safe delivery of all funds and documents to their proper recipient by the close of the escrow.
Parties to an Escrow
Principals: The principal is who the escrow holder is essentially working for and the escrow instructions are the principals‘ directions to the escrow holder.
Principals are considered any of the following: • Buyer & Seller in a sale • Borrower & Lender in a refinance • Lessor & Lessee in a lease or rental agreement • 1st party & 2nd party in an exchange • Vendor & Vendee in a land contract
Other Parties: • Real Estate Brokers & Sales Agents • Title Insurance Officers & Representatives • Lenders • Termite Companies • Insurance Agents • Homeowners Associations • Attorneys • Government Agencies for loans, taxes, etc.
The team of professionals at Celebration Escrow in Temecula, CA have decades of experience handling residential escrow settlement, ensuring the needs and requirements are met by all parties involved in the transaction. We understand that buying a home is the most important real estate investment you will ever make, and you can be confident that your escrow transaction is handled professionally, accurately and with diligence.
Commercial escrow settlement involves transferring property such as industrial property, note sale transactions, retail property, offices or apartment complexes. At Celebration Escrow in Temecual, CA, we understand the unique aspects of handling commercial escrow and note sale transactions, as these transactions often become very complex. In many cases, the escrow officer is the sole party with a grasp of every transaction and closing requirement. Count on the Celebration Escrow in Temecula, CA agents to have the skill set necessary to manage every detail of commercial real estate escrow transactions.
Real estate owned (REO) or foreclosure escrow transactions are very different from regular real estate escrow, and in many cases more complex. These escrow transactions require a unique and specialized approach, including strict adherence to sale conditions when the property is owned by a bank. As REO sellers are usually dealing with a large volume, many employ a number of professionals who manage the sale of bank properties.
To ensure REO escrow transactions are closed as quickly as possible, the officers at Celebration Escrow in Temecula, CA proactively manage and resolve any problems before a delay can occur and monitor the performance of the transaction daily.
Short sales are transactions in which the sales price is lower than the balance owed on the property’s loan and closing costs, with the lender deciding to allow the sale for less than the amount owed with the seller receiving no proceeds from the sale. Homeowners turn to short sales to avoid the greater harm to their credit rating associated with foreclosure, while lenders benefit by avoiding the greater expenses associated with the foreclosure process.
Celebration Escrow in Temecula, CA has a team of short sale professionals who understand the inherent complexity of short sale escrow transactions. We will guide you through the entire process and work toward successful closing while managing every detail and maintaining a proactive approach to avoid delays.
Many consumers attempt to save money by buying or selling a property on their own without an agent. Celebration Escrow in Temecula, CA manages escrow accounts involving For Sale By Owner (FSBO) properties. Our agents are experienced in dealing with these unique escrow transactions and ensure all city, county, state and federal requirements are met and all parties receive the necessary disclosures and forms to complete the transaction successfully.
Closing escrow on multi-family properties in California comes with unique challenges. Count on the professionals at Celebration Escrow for a simple, streamlined approach with superb, flawless service that ensures every party involved maintains confidence in the escrow process.
Closing Cost Check List
The cost of buying property goes beyond simply paying the price negotiated between they buyer and seller.
Here are some of the common fees included in a typical settlement:
Title & Escrow Related Closing Costs
Loan Related Closing Cost
A fee charged for preparing loan
documents such as the mortgage, note and other legal disclosures
Notary Fees / Signing Fees
fees that are charged for taking
an acknowledgment or proof of a deed, or other instrument, to
include the seal and the writing of the certificate.
Escrow fee (typically based on Purchase Price)
fees charged by the escrow company acting as a disinterested third party, holding legal documents and funds on behalf of a buyer and seller.
cost for delivering documents to all those
involved in a real estate transaction.
Loan tie-in Fee
the fee charged for signing and packaging
the Buyers loan documents
Electronic document delivery fee
the fee charged for the
delivery of documents by email or scanning to digitize documents.
Owner’s Title Insurance Policy (based on Purchase Price)
Owner title insurance generally insures against various defects in title to the property; fraud, forgery, and defective signatures on legal documents related to the property; defects in the public recording of a transfer of real property; tax liens, mortgages, judgments or other encumbrances secured by the property; and
restrictive covenants (limiting the use of the property).
Lender’s Title Insurance Policy (based on Loan Amount)
Lender’s title insurance protects the lender against problems with the title to the property that occurred before the date of the policy.
Loan Origination Fee
is a payment associated with the
servicing, handling and processing associated with taking out
Loan Discount Points (optional)
These are paid by borrowers at closing to reduce the mortgage rate on a home loan
Fee charged for a comprehensive report to
determine the value of a property.
Credit Report Fee
A fee charged to pull your credit report
from the three leading credit agencies when appling for a mortgage.
Typically the buyer is required to pay
interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins.