Eight Facts about the Escrow Process in Real Estate Transactions

Are you curious how to navigate the unchartered waters of real estate transactions?  Have you recently entered into negotiations over expensive property?  Whether you are looking to become an investor, business owner, or homeowner, real estate may be one of the biggest financial investments you'll make in your life.  For this reason, you'll want to trust professionals in the industry to advocate for you.  Our real estate closing attorney in Miami, FL has experience from everything from titles to negotiations to escrow.  If you find yourself in a complicated escrow process, you may want to have us there for you.  There are a few things that you should understand about the escrow process.

Opening Escrow is the First Step

The first phase of this process involves collecting all the necessary information from all the parties that are involved.  This can involve any stipulations that are relevant to the escrow and the price of the home or property being sold.  During this first step, you will open an escrow account where the funds will be located until ownership is taken over by the new buyer.

You Need to Wait for the Appraisal

Once the escrow has been opened, it is now time to wait for the lender's appraisal of the property.  This is typically done by the bank or the lender in order to protect the buyer's financial interests and ensure they are getting the right price for their sale.  This will also determine the final price of the property.  If the appraisal comes in lower than the asking price, the lender will not provide you with financing for the difference.  This means that you will need to come up with the cash in order to make up the difference or negotiate a different offer.

It Involves Checking on the Title

Before ownership is transferred to the buyer, all the Title documents will need to check out.  Title companies will often work closely with you to ensure that all encumbrances are cleared from the Title.   This typically includes any liens, judgements, forgeries, fraud, or anything else that will need to be cleared before the Title can go through processing.

You May Also Work with an Escrow Officer

When the transaction is in escrow, you may be working with an escrow officer and other individuals to make sure that the process goes smoothly.  These professionals act as a neutral third-party that handles the Title and escrow work, including all paperwork that is related to the real estate transaction.  These range from title transfers to mortgage refinancing documentation.  You may also want to continue working with your real estate closing attorney in Miami, FL during this process to ensure that all the documents are being handled properly.  It is always advised to have an advocate working from you when you are investing your money in real estate.

This Process Requires Many Documents

In order to process escrow, you will need to collect much more information and use many more documents.  This can become taxing, so you want the process to be in the right hands.  To get to the closing, you will need to obtain a preliminary Title Report, secure the funds necessary for the transaction, and sign any relevant documents.  Often times, the third-party will handle all the documents to make sure that other parties follow the instructions and that they are all filed properly.  

Obtain Insurance Coverage

Before any transaction can be completed, the buyers will need to provide proof of insurance.  Typically, these documents will need to be secured by the time of the real estate closing.  Without proper homeowners' or property insurance, the deal may fall through.  Also, title insurance is essential for transfer of power.  As a real estate closing attorney in Miami, FL, we help many buyers acquire the proper insurance for their needs.  Our knowledge helps them save money on their policies while also ensuring that they are protected in the event of a disaster or extensive damage to their property.

Approval of the Contingencies and Disclosures

To move forward with the process, the seller will need to approve the buyer's disclosures.  Also, all contingencies must be met and lifted.  This involves taking information that was collected during the appraisal and making any necessary adjustments to the offer.  For example, the property may have been violating codes that you weren't aware of.  This can require you to make repairs or come down in price to allow the buyer to take care of the repairs upon move in.  When these issues are discussed and agreed upon, you will finally be ready to close escrow.

The Closing is the Final Step

Whenever people finally find their multifamily investment property, they will be eager to finally reaching the closing.  This is the final step that marks the transfer of power in the real estate exchange, which will finally give the buyer ownership.  In order to make the closing go smoothly, all of the parties involved will need to come prepared with the right statements, loan information, and Title information.  Without the proper documentation and funds, the closing will not be able to occur.  At the closing, you should always have your representation present.  Our real estate closing attorney in Miami, FL will be able to provide you with the information that has your best interests in mind during this transaction.

These are a few facts that will help you better understand the escrow process and what to expect when you enter into it.  As an experienced real estate closing attorney in Miami, FL, we have helped many clients through difficult negotiations and complicated escrow situations.  You will want to trust our advocacy and expertise so that your financial and real estate future is protected.  Contact us to schedule a consultation with our expert attorneys today.