Earnest money to close

FROM EARNEST MONEY TO CLOSING...

THE LIFE OF A REAL ESTATE TRANSACTION

SALE AGREEMENT

TITLE INSURANCE

Once a Sale Agreement (sometimes called an Earnest Money Agreement) is completed, the buyer’s real estate professional deposits the earnest money check with the title company along with the Sale Agreement.

Ordered by either lender, real estate professional, seller, buyer, or escrow officer.

ESCROW Arranged by either: lender, real estate professional, seller, or buyer.

The Escrow Officer is a neutral party that holds and disburses the parties’ funds, prepares an accounting of the transaction, and prepares deed to transfer ownership under written instructions—all in accordance with terms of the Sale Agreement.

The Escrow Officer reviews the Sale Agreement and preliminary title report for necessary information to comply with parties’ requirements for closing.

The Escrow Officer orders payoffs on underlying mortgages and/or contracts and any other monetary liens encumbering the property.

The Escrow Officer requests information relative to the underlying encumbrances and other pertinent information not disclosed by the Sale Agreement.

FIRST AMERICAN TITLE 121 SW Morrison Street, 300 Portland, OR 97204 503.222.3651 cs.portland@firstam.com www.firstampdx.com

OFFICE

The seller provides an owner’s title insurance policy to the buyer, and the buyer provides a lender’s title insurance policy to lender. The title company searches the records of the county recorder, county assessor, and other government agencies to locate any documents that might affect title to the subject property.

A search of the general index (county recorder) should disclose bankruptcies, divorce, change of names, judgments, probates, or other cases entered into the public records of the court.

A preliminary title report is then issued revealing all matters of public record affecting subject property and involved parties. A copy of the report will be distributed to all parties of the transaction.

It is the responsibility of the Escrow Officer to clear title of all encumbrances to complete the transaction.

FINANCING AND PROCESSING Arranged by the buyer.

The lender processes (underwrites) the loan to include review of the buyer’s verification of funds to close, employment history, credit report, and appraisal of the property. Upon loan approval, the lender’s closing department prepares the loan package (loan documents) with specific instructions to escrow. The lender and escrow officer will collaborate on the preparation of the Closing Disclosure which must be delivered to the buyer at least three business days* prior to loan consummation. The escrow officer will prepare an estimated settlement statement and tell the buyer the balance of the down payment and closing costs needed to close the escrow.

SIGNING After the Escrow Officer has reviewed the loan package, and prepared the settlement statement and transfer documents, appointments will be made with the buyer and seller to sign. Each buyer and seller will have the opportunity to review the documents and ask questions of the Escrow Officer. Once each is satisfied, they will sign the documents and the Escrow Officer will notarize them. The buyer’s closing funds are deposited with escrow at this time, in the form of a wire transfer or cashier’s check.

CLOSING Upon approval by the lender, the deed and deed of trust (mortgage) are delivered by the title company for recording with the county recorder. Authorization to close is given to the Escrow Officer who then “closes” the transaction by releasing the document to record.

1. Confirms receipt of lender’s funds into the escrow account.

2. Disburses all escrow funds in accordance with all parties’ instructions, as follows: A. Pays off all underlying debts or encumbrances on property and all bills submitted to escrow (pest inspections, septic pumping, chimney cleaning, roof repairs, etc.)

B. Pay real estate professional’s commission.

C. Pays seller the net proceeds of the sale.

3. V erbally notifies seller, buyer, and their real estate professional’s that the transaction is CLOSED. The buyer is allowed possession of the property as agreed upon in the Sale Agreement.

Lender Review After all documents are signed, the Escrow Officer returns the loan documents to the lender for final review. Lenders ask that we allow at least 24-48 hours for this process. The Escrow Officer also requests loan funds from lender at this time, usually in the form of a wire transfer. * For purposes of the Closing Disclosure“business day” is defined as every day except Sundays and Federal legal holidays.

First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions.

First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.

39127460716

©2018 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF