Step 6 | Escrow | How to Buy a Home Murrieta Ca

So you’ve negotiated the contract to buy a home, you’ve gotten through the counter offer process and now you are ready to open escrow. So what is escrow and why do we need it exactly? That’s what we’re talking about today and we are starting right now.

Hi, I’m Jessica Genung with Active Realty and I’m a Realtor in the Murrieta/Temecula Valley.

Today we are going to be discussing Step #6 in the home buying process which is Escrow. If you want a copy of all the 8 steps in the home buying process, go ahead and click the link down in the description for my Buyer Roadmap. It’s available for immediate download. I’ve been getting so many questions about escrow lately, especially from buyers moving to California from out of state, where they do real estate transactions differently. So I thought I’m glad to be covering this topic today.

An escrow company provides a very important service during the home buying and selling process. Let’s say you make an offer on a home here in California and the seller accepts your offer. Yay, everyone is pretty excited at this point! But now what?

Well, you now have an executed contract and are ready to open what we call “escrow.” While in escrow, documents and money need to be exchanged between the parties involved to complete the deal. The escrow company and the escrow agents that work there, are a neutral third party that help facilitate the transaction.

In some states the escrow agent is an attorney, but that is not a requirement in California. The escrow agent does has a fiduciary duty to all the parties involved, which is a high standard.

One of the first steps escrow will take is collecting the earnest money deposit. The earnest money deposit is a good faith payment made from the home buyer to the seller to take the property off the market after an accepted offer.

In my market here in the Murrieta/Temecula area, it’s typically about 1% of the purchase price. Later in the transaction, escrow will also be handling the changing hands of any down payment, mortgage funds, as well as the title to the property. Escrow, essentially a middle man, helps reduce the risk of a title changing hands without funding.

I would describe escrow as being at the center of the settlement process. They are going to carry out instructions pursuant to the Contract between the Buyer and Seller, they are going to obtaining the documents and reports necessary, communicate with the Lender for loan documents, work on getting the funds from the Buyer and Lender to close, ensure the liens and Vendors are paid and finally they will disburse the final net proceeds to the Seller.

It is my understanding that you do not actually have to use escrow to facilitate a transaction, but I would never recommend that. They are there for everyone’s protection!

Thanks for watching and if you to learn more about the home buying process or moving to my area in the Murrieta/Temecula Valley, don’t forget to subscribe! Till next time.