Buying a home is exciting, especially your first one, and there are multiple important steps to be accomplished along the way.
Getting your pre-approval once you decide to buy is an early one, and critical so you know what you can afford, which includes paying attention to your personal budget.
Then comes the day you find the home you love and it’s time to make an offer. Waiting for the response from the seller is always a nail-biter, but so exciting when you get word your offer was accepted.
But somewhere along the way you hear about “opening escrow!” What does that mean?
First, you might want to read this post about escrow here in California to understand more about how an escrow company works, and what they do during your transaction with the seller (things are done differently here in CA compared to some other states who do not use escrow companies).
You might also check out my video series on how to buy a home and a bunch of important things you should know!
As far as escrow is concerned keep in mind I am speaking from the perspective of a busy Carlsbad Realtor; opening escrow is initiated by the listing agent, with the escrow company of choice (it might be your choice, but commonly in our area it’s the seller’s choice, but that depends on what is negotiated). The Listing agent provides a copy of the executed Residential Purchase Agreement (RPA) – your offer – and the escrow officer sets up an official account/file for the transaction, with an escrow number, to begin tracking all the required documents, and create the escrow instructions.
The escrow officer will provide your agent with the escrow number which identifies the specific file for tracking purposes (your lender will need this as well). The escrow officer will also provide wiring instructions – the bank, bank account #, the escrow #, address – so you can wire your deposit (a.k.a. deposit, or earnest money or EMD) within the time frame specified in the contract (normally 3 business days after acceptance).
Because of increasing issues with wire fraud, and email accounts getting hacked, wiring instructions are usually sent from escrow to buyers via encryption. These instructions should ALWAYS be verified over the phone with the escrow officer.
Opening escrow generally happens soon after the contract is signed (except on weekends). Keep in mind you are obligated to the start of the contract countdown (i.e., the day AFTER acceptance) even if escrow is not opened due to the weekend or a holiday.
Because opening escrow starts a chain of events with specific dates and tasks, I provide an Opening Escrow Checklist to my buyers so they know what to expect (e.g., inspections, investigating homeowner’s insurance, seller disclosures), n addition to reminders along the way.
If I can help you think through your home buying requirements, and your wish list, in light of your budget and other factors, and answer any questions about the home buying process and local market conditions, please give me a call at (760) 840-1360. Then we’ll get started on finding you the right home that meets your needs, lifestyle and budget!