Life of an Escrow: Part One

This is the first in a series explaining the escrow process and how a real estate transaction works once the Buyer and Seller have come to terms on a purchase agreement.

An escrow begins the moment an Escrow Company receives a fully executed purchase agreement and earnest money deposit. This process is the culmination of a series of events that bring Buyer and Seller together to transfer ownership of a home, commercial building, business or many other types of transactions.

For the purposes of this discussion, we will use a traditional residential sale to describe the Life of an Escrow.

As mentioned above, escrow begins when a fully executed purchase agreement and earnest money deposit are delivered to escrow. With today’s technology, this can be within moments of pen hitting paper on the purchase agreement, but the process typically begins the following business day.

After receipt of the agreement and deposit, the Escrow Holder will review all of the paperwork, taking special care to note the terms of the transaction, the vendors to be used for inspections and other issues that will need to be addressed before escrow is closed. Following this review, Escrow Instructions will be prepared and issued with other supporting documents that are required and specific to the transaction.

Simultaneously with the issuance of the Escrow Instructions, the Escrow Holder will contact the Title Company chosen by Buyer and Seller and request that a Preliminary Report be prepared. This Report will disclose to all parties the various liens and encumbrances that are recorded against the property in question. Prior to close of escrow, any items specific to the Seller will need to be cleared by the Escrow Officer, who will obtain the proper documentation to determine what monies are owed or what documents must be prepared to remove these “Seller specific” items.

These preliminary steps are the foundation of a complex series of events that must take place prior to the close of escrow, but as the neutral third party to the transaction, your Escrow Holder will manage the transaction and guide everyone to that goal.

Stay tuned for part two of this series where we'll discuss the processing of an escrow, including how the Escrow Holder obtains the documentation mentioned above.

What is an Electronic Signature?

Technology has taken over the world and improved every industry, including the real estate industry. With technology, the real estate industry is constantly becoming innovative and making processes simpler and more efficient. The latest form of technology that has helped make the real estate industry more efficient is electronic signatures (E-signatures). The electronic signature service streamlines workflows and reduces the time it takes to complete transactions. On average, 50% of forms are completed in less than 8 hours and 97.4% are completed in less than 48 hours. And electronic signatures can easily handle last minute revisions without delaying a sale.

An electronic signature is any paperless and legally recognized means of entering into a contract, including electronic symbols, sounds, or processes logically associated with a contract. They can include agreements made by email, facsimile or entering your personal identification number into an ATM. Many people use electronic signatures on a daily basis without realizing it. Paying a bill online or purchasing a product through a website are simple daily examples of electronic signatures.

Benefits of using electronic signatures in the Real Estate Industry:

Safe and Reliable

Electronic signatures include an encrypted code ensuring its security as well as its legality and enforceability. After the signing is completed, the electronic signature database digitally stores all documents for quick and easy access when needed.

Save Time, Save Money and Go Green!

With electronic signatures, the need for paper-based contracts is totally eliminated. Documents can be signed online from anywhere and at any time you have computer access thereby saving the time, travel and money associated with chasing down volumes of paper.

As part of Escrow of the West’s ongoing commitment to provide a level of service unparalleled in the industry, we are pleased to introduce the availability of electronic signatures to our delivery options. Always on the cutting edge of technology, Escrow of the West has teamed with DocuSign®, the market leader and global standard for electronic signatures to offer a complete web-based eSign solution to help our clients close business more efficiently and safely. Our technology experts can show you everything that you need to know about DocuSign®. Give us a call for more information.