Closing Escrow can be a confusing process if you are new to purchasing a home in Arizona. Here is a simple guide to help you understand what happens each step of the way:
Step 1: Open Escrow – When the escrow is opening, it means the title company has received a signed purchase contract with all amendments and addendums, plus an earnest money deposit. This deposit is typically in the form of a check for 1% of the purchase price, which is made payable to the title company.
Step 2: Fax Receipts – The earnest money receipt is then faxed over to both agents as well as the lender within 24 hours. The escrow number and contract information that is known at the time will also be sent.
Step 3: Escrow Officer Develops The File – The escrow officer will order your preliminary title report and fax it to the lender, as well as the real estate agents. The officer will also schedule a signing appointment with the seller. The homeowner’s association is notified and the appropriate HOA statements are ordered. The seller’s written mortgage loan payoffs are ordered. Lender’s loan terms are discussed and reviewed. A termite report is remitted to the escrow officer by the buyer as well as the homeowner’s insurance information. The pre-audit HUD 1 settlement statement is faxed over to the agents and the lender. Once all of the loan documents are received, the escrow officer schedules a signing appointment with the buyer.
Step 4: Escrow Signing – Signing occurs with both sellers and buyers prior to the close of escrow (COE) date on the purchase contract. Both parties must bring along valid photo ID. Upon completion, the lender’s documents are returned to the lender for review, approval and funding. This process can take a day or two, so be sure to allow enough time for these signings. Once the funds are received, the transaction can be recorded.
Step 5: The Escrow Closes and deeds are recorded in the county of the property being transacted.
Step 6: Funds Are Disbursed – Once all of the recording information has been confirmed, the funds are disbursed and final closing packages are ready to be picked up, delivered or mailed to all parties.
