10 Steps to Closing

Congratulations on a fully executed contract. This is the first in a series of steps needed to close. Please keep this document and refer to it as needed. I’m always available to answer any questions you have.

There is a date in your contract by which the buyer will need to produce the commitment letter from their lender, which indicates the bank’s commitment to finance the buyer’s loan. This is different from the pre-approval that your buyer most likely produced with their offer. The preapproval indicates the bank’s willingness to lend; the commitment indicates the bank’s commitment to lend.

Your buyer will submit the executed contract and all of their financial documentation to their bank for financing. This may happen right after the signed contract, or your buyers may continue to shop around a bit for the best interest rate. They are not required to submit documents to the bank by any given time so long as they produce the bank’s commitment letter by the date outlined in the contract.

Once the bank has received and reviewed the buyer's documents, they will contact a 3rd party to hire an appraiser. The appraiser will evaluate the property based on recently sold comparables and like features. Co-ops will be compared to other co-ops, not condos; houses to houses; two families to two families. They will be looking for the most similarities between them.

The appraiser will coordinate with me to gain access. You do not need to be there. It is imperative that you treat the appraisal as a showing, so please make sure the space is as neat as possible.

The appraisal can take up to 10 business days to come back into the bank. Sometimes buyers will share what the apartment appraised for and sometimes they won’t, but it won’t affect anything unless the appraised value is lower than the purchase price on the contract.

Once the appraisal is in, the commitment letter should follow within 10 business days or up to two weeks.

Simultaneously, if you are in a co-op, the buyer’s broker will be aiding them in compiling all of their supporting documentation for the board. We will vet this package once they are done with it, and then submit it to the managing agent. You may be asked to sign some documents for management as part of the board package, but other than that here is nothing you will need to do. Once the board has read through the board application, they will call the buyers in for an interview.

Once the commitment letter is received, the bank will work on clearing the buyer to close. Usually that involves updating any outdated financial information or providing extra documentation.

Finally, the attorneys will schedule the closing once the lender has said that the buyer is cleared to close. It is important to communicate with your attorney to let them know your preferred dates and times.

Final walkthrough — ahead of closing the buyer will come through the property to ensure it is in the same condition as when they signed the contract. It is important that if anything happens between now and closing that you let me know immediately so we can get it resolved in time

Congratulations on this first big milestone and please reach out to me with any questions!


The Escrow Process

How Does the Escrow Process Work

The escrow is a depository for all monies, instructions, and documents necessary for the purchase of your home, including your funds for the down payment and your lender's funds and documents for the new loan. Generally, the buyer deposits a down payment With the escrow holder and the seller deposits the deed and any other necessary documents with the escrow holder Prior to the dose of escrow the buyer deposits the balance of the funds required and agreed upon by the parties With the escrow holder.


The buyer Instructs the escrow holder to deliver the monies to the seller when the escrow holder:

  • Forwards the deed to the title company for recording
  • Is notified by the title company that a policy of title insurance can be issued showing title to the property is vested in the name of the buyer

The escrow holder thus acts for both parties and protects the interests of each within the authority of the escrow Instructions. Escrow cannot be completed until the terms and conditions of the instructions have been satisfied and all parties have signed escrow documents, The escrow holder takes instructions based on the terms of the purchase agreement and the lenders requirements. 


Escrow Duties

The escrow officer's duties typically include the following:

  1. Receive Signed Purchase Agreement; prepare escrow instructions.
  2. Receive and deposit buyers earnest money into an escrow account
  3. Serve as the neutral agent and liaison/communication link to all parties to the transaction.
  4. Order Preliminary Report to determine status of title to property.
  5. Request beneficiary's statement or payoff demand related to existing financing.
  6. Comply with lender's requirements as specified in the lenders closing instructions.
  7. Secure releases of all escrow contingencies or other conditions required.
  8. Prorate taxes, interest, insurance and rents.
  1. Prepare or secure the transfer deed or other documents necessary to consummate the transaction.
  2. Arrange appointments for buyer/seller to Sign documents.
  3. Request and receive purchase funds from the buyer and loan funds from new lender.
  4. Close escrow pursuant to instructions provided by seller, buyer, and lender.
  5. Arrange for recording of deeds and any other documents as instructed.
  6. Request issuance of the title insurance policies.
  7. Disburse funds as authorized, including charges for title insurance, recording fees, commissions, and loan payoffs.
  8. Disposition of all funds held in escrow account.
  9. Prepare final accounting statements for the parties.

Communication Tips for Escrow

  • When calling the escrow officer, have the escrow number and buyer/seller's names handy.
  • Keep the escrow officer informed on any matters that may affect the transaction.
  • Direct your questions to the proper representative, such as:

Real Estate Agent: Physical aspects of property, conflicts, and terms of sale.
Lender: Loan terms, credit report issues, etc.
Escrow Officer: Escrow instructions, documents and forms to be filled out.

The Life of an Escrow

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Karen Morton provides enthusiastic, personalized service with proactive representation throughout each transaction and beyond. Contact her today to discuss all your real estate needs.

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