| So you have found the home of your dreams and | | | | every contract will be unique but it may be likely that |
| you have the money to buy it. You put in an offer | | | | yours should include: |
| and low and behold, it's accepted, you my friend are | | | | 1. Inspection Contingency: this should be completed |
| in Escrow. Do you feel like asking yourself, "What | | | | as soon as possible after the contract to purchase is |
| does that mean exactly?" You are on your way to | | | | signed. If an inspection comes back with negative |
| owning your very own home, congratulations! | | | | results there is a possibility that you may want to |
| The Escrow process is fairly straight forward but can | | | | consider canceling the contract. |
| be complicated by a number of roadblocks thrown up | | | | 2. Financing Contingency: once the contract is signed, |
| by either side of the transaction. It is important to | | | | you have a period of time to secure funding. If, for |
| consult with and follow the advice of and | | | | any reason, you are unable to secure funding during |
| experienced Realtor in your area to ensure that the | | | | the period of time granted to you by the contract |
| process will go as smoothly as possible. | | | | (and the seller will not provide a written extension of |
| First you will be asked for a good faith deposit to be | | | | time), you must decide whether you want to |
| deposited in escrow. Your deposit check will be | | | | remove the contingency and take your chances on |
| cashed, so make sure that you have sufficient funds | | | | getting a loan. |
| in the account. Assuming the sale goes through, this | | | | 3. Clear Title: A requirement that the seller must |
| money will be applied to the purchase price of the | | | | provide marketable title. Have an attorney or title |
| home. If for any reason the sale is not | | | | officer review the title report for the property. The |
| consummated, you may be entitled to receive all of | | | | title must be "clear" to ensure that you do not have |
| your deposit back, less standard cancellation fees. In | | | | legal issues regarding your ownership or that may |
| certain instances, the seller may be able to retain this | | | | affect resale. |
| money as liquidated damages. Prior to executing a | | | | It is important to procure homeowner's insurance. It |
| purchase contract, it would be wise to speak with | | | | will most likely be required before you can close the |
| your counsel regarding whether or not it is your best | | | | sale and is a great way to protect yourself. It is in |
| interest to have a liquidated damages clause as part | | | | your best interest to apply for insurance as soon as |
| of the contract. | | | | possible after the contract is signed. Acquiring the |
| The roll of the escrow company will be to hold your | | | | insurance may require a lengthy period of time |
| deposit and coordinate much of the activity that | | | | especially if you are required to obtain special policies |
| goes on during the escrow period. During this period | | | | such as fire and earthquake insurance. |
| the escrow company will act as an independent third | | | | Remember to contact your local utility companies. |
| party so that you know when and whom to give | | | | You will need to schedule service activation to |
| your money, to get the deed to your new home. | | | | coordinate with the close of escrow. This way when |
| You will be asked for a down payment on the home | | | | you are able to move in you will have use of all of |
| you are purchasing by your mortgage broker. The | | | | your appliances and lighting. Moving furniture in the |
| amount you put down is usually determined by a | | | | dark is no picnic. |
| percentage of the purchase price, but remember, the | | | | Schedule the final walk-through inspection and take |
| more you put down toward the total price of your | | | | your Realtor with you 5 or so days before you are |
| home, the less time it will take you to pay off and | | | | scheduled to close escrow. At this time that make |
| the less your mortgage payments will be every | | | | sure that the property is exactly as the contract |
| month. | | | | says it should be. What you thought to be a |
| The time period that you are "in escrow" will be | | | | "permanently attached" chandelier that would come |
| predetermined in your purchase agreement with the | | | | with the property might have been removed by the |
| seller. A standard and fairly efficient escrow period is | | | | seller and replaced with a different fixture entirely. |
| often 30 days, but may be longer or shorter. During | | | | Walk through and make sure that you got exactly |
| this time, each item specified in the contract must be | | | | what you paid for. |
| fulfilled in a manner agreeable to both sides. Your | | | | Congratulations, you've made it through your first |
| purchase contract will also have included the escrow | | | | escrow! Once the sale has closed, you will be the |
| closing date and the contingencies. Keep in mind that | | | | proud owner of a new home. |