Homebuyer's Escrow Process Explained: What to Expect

hey listen you've been working your tail off to get into that escrow you want to get your offer accepted and you did it you're probably excited as hell told the whole world put it on facebook but you're probably scared as hell also you're probably scared to death because now what you don't just get your offer accepted and walk away now the real work begins you're now on the field before you were in the stands watching the game uh-uh now you're on the field playing the game but you're not alone it's gonna be you your buyer who i want you to protect at all times and the lender if there is a lender involved you three individuals on that playing field and the whole idea is to get to that finish line win the game close the deal not just open it anybody can open a deal but people with tenacity people who are goal oriented don't want to see something accomplished like closing this deal are responsible and together we'll get to that finish line give the buyer his keys you earn your commission and the lender moves on with his life but we have to understand that they're milestones when it comes to the escrow process let's make it a little easier for you i want you to understand how the process works when it comes to the escrow and your buyer ready here it goes let's go on an adventure you the buyer the lender let's take off here we go i want you to remember that the first thing you're going to do when both sides the buyer the seller signed the contract i want you to open escrow nice and simple you're gonna hire an escrow company not the escrow company's job ready here it comes the escrow company's job is to protect the integrity of the transaction so i want you to go straight to an escrow company one that you both agree to both sides the buyer side and the seller side both agree to and open escrow now escrow's first step is to collect the earnest money deposit from your buyer so what do i want you to do as a real estate agent representing the buyer i want you to remind that buyer to get their money into escrow asap typically they have three days from when you opened escrow so they got a few days but the sooner the better so escrow will be collecting funds from the buyer so make sure your buyer does that now another thing escrow is going to do for your buyer is they're going to send the buyer what's called escrow instructions this is crucial escrow's job is to review that contract that you signed with the find tooth comb once they do that they're going to place that on their letterhead they're going to go to their computer put it all under their letterhead and say here's the sales price that you both agree to here's the amount of escrow days that you agree to let's assume it's your typical 30 day escrow and all the other stipulations that you guys agree to they're going to put it on their letterhead and make it official man and they're going to send that package over to your buyer and your buyer is going to receive it and of course the buyer is going to review it with you the agent now once you receive it you and the buyer are going to review it to make sure everything's hunky-dory beautiful just the way you guys agreed to with the sellers done now let me remind you when you signed this contract when you made the offer there was some protection involved for your buyer these are called contingencies these are called contingencies your buyers say yo seller how you doing i'll make you this offer for a million dollars on your house i'll make you a one million dollar offer only if it passes my appraisal contingency i'll make you an offer only if it passes my inspection contingency i'll make the offer on your property only if it passes my finance contingency my loan contingency so you got safety nets involved your buyer has some safety nets which is crucial now based on these safety nets on these contingencies we have to make certain that you understand that time is of the essence let me bold it underline it italic the whole thing time is of the essence now in this contract it states this yo buyer you have contingencies in place you have protection in place when it comes to this contract but time is of the essence which means we have milestones these contingencies aren't just on a whim you could do whenever you want to do them they're all dated guided everything in the contract is based on dates now let's talk about these milestones ready here it goes by day seven stick with me by day seven i want you and your buyer to be expecting from the seller from the other team seller disclosures that disclosure what a word what does the word disclosure mean it means to disclose disclose and what yeah disclose so the seller's going to give us a whole bunch of paperwork disclosures be about this many about this stick of paperwork and you're going to sit there with your buyer because you want to protect your buyer right you want to protect your budget you're going to review the disclosures all the information the cell just gave us in writing pertaining to this property pertaining to the area the property is located it's all gonna be on these disclosures and you get a chance to review it with your buyer and if your buyer is happy with the disclosures the escrow continues nice and simple mind you the milestone is day seven you want those damn disclosures by what day yeah day seven so if day five comes around day six comes around i recommend you as the buyer's agent to do what yeah go knock on the seller's agent's door call the seller's agent hunt him down or her down and say hey where the hell are my disclosures man i gotta protect my my buyer they need to know everything there is to know about that property they're buying now let's go to the next milestone the next milestone is day 17. let me backtrack remember those contingencies remember those only ifs remember those safety nets for your buyer well those safety nets typically expire on day 17 per contract per the contract is written right there on day 17 on day 17 those safety nets must be removed which means the minute your buyer opens escrow the minute you open escrow the buyer has some work to do now work with who they have to satisfy themselves with these contingencies before they remove them let's talk about these contingencies the appraisal contingency now who's involved with the appraisal the value of the property the lender so the lender the buyer's lender is now involved now that we know that the lender's involved we have to remember please remember this i want you to remember the buyer's triangle i'm going to gift you this the buyer's triangle the buyer's triangle reinforces the commitment between the lender your buyer and yourself once you think of a triangle i want you to put the realtor up top that's you the facilitator i want you to put the lender in the other corner and last corner i want you to put the buyer use three individuals created this triangle and must have communication you three will get us to that finish line you got it nice and simple when it comes to the loan contingency and the appraisal contingency who are we focusing on we're focusing on the lender because that's his responsibility he's going to help us satisfy these contingencies so you want to make sure that those are satisfied by day 17. now the home inspection crucial you want to set that up at the minute that gun goes off the minute escrow opens i want you to set up that home inspection because by day 17 let me remind you by day 17 you have to remove that contingency which means by day 17 you have to order the home inspection with the professional you have to review the results of that home inspection you have to decide do i want to move on with this escrow i don't want to cancel it based on what i just read here on the inspection report that inspection report is crucial you have somebody who's going to protect you go into this property and say hey if i were you i'd run right now i wouldn't buy this house or they would say hey this property here that you're looking to purchase looks fine has your typical damage not a big deal if i were you i'd buy it based on this information you'll be able to make a nice solid decision a comfortable decision and don't forget come day 17 guess who's going to come knocking and banging on your door yeah the seller's agent saying remove all your safety in this buyer we want a commitment from you mr buyer mrs buyer we want to make sure that you are at the point of no return aha we have one safety net left and that safety net is the loan contingency in that loan contingency expires on day 21. so we still have a few more days that allows the lender to make sure all the t's are crossed and all the eyes are dotted and gives them comfort knowing that they have a buyer who's completely qualified completely approved for this loan so guess who's going to come knocking on day 21 also might be a softer tap and they're going to remind you please remove the loan contingency it's day 21. your home inspection went perfectly the appraisal went fine the loan contingency is gone and we're comfortable with the loan let's close this deal man let's close this deal well now what it's a 30-day escrow it's a 30-day escrow next step and getting closer to that finish line ready wait for it the beginning of the end as i like to call it our loan documents the minute our lender remember the lender remember that triangle the minute the lender calls us and says hey guys hey team hey buyers team i got the loan documents ready you now know it's the beginning of the end wow the beginning of the end you've worked your tail out this whole escrow period you did fantastic when it came to facilitating it you contacted the escrow department you contacted the lender you were involved with the seller's side you're involved with everybody as a realtor but you always focus on protecting the buyer here it goes loan docs are in you're going to meet your buyer at the lender's office why not there'll be a notary there have a cup of coffee with these people you guys are on the same team and your buyer's gonna sit there for about an hour and they're going to sign their life away signing loan documents is what yeah the beginning of the end next step after that the loan is funded the funding simply means the lender wires the money to either the escrow company if an escrow company is being used or the title company and say here's the money to buy the house for the buyer nice and simple of course what the escrow company or title company will do of course we'll wire that money over to the seller we don't care we want the buyer in their new home so the day comes when your buyer is going to cross that finish line fireworks are going to go off it's going to be an exciting day now that's the day ready the last and final step recording recording let me say it again recording when the escrow company contacts you the agent the buyer's agent says we have confirmation of recording of recording with the county recorder's office it is officially a done deal the race is over your buyer just buy themselves a house you just help them facilitate the close of this deal you just closed your first deal man from day one when that gun went off to protecting them with contingencies to facilitating the loan with the lender making sure everything's hunky-dory there to communicating with the seller's side making sure all things were met in that contract all the way through the loan documents to the funding to the recording you did it you worked your tail off and that's how it's done when it comes to protecting your buyers hey listen i know i bombarded you with a whole bunch of terminology in this video listen but contingencies let's clarify it check out this video it'll do you some good we'll see you next week

Channel: US Realty Training

Views: 5,357

Keywords: real estate license, real estate agent, ca realty training, real estate school, real estate, california, realtor, online real estate school, new real estate agent, how to represent homebuyers, homebuyers, represent homebuyers, new agent representing homebuyer, real estate agents homebuyers, escrow process, homebuyer escrow, homebuyer escrow process, represent homebuyer in escrow, escrow, process escrow, homebuyer in escrow, homebuyer process escrow, new agent, new realtor, buyers

Id: VH7AkTPwwCE

Length: 10min 12sec (612 seconds)

Published: Wed Oct 06 2021