A Buyer and Seller’s Guide for a Productive Escrow Period
Buying or selling a home should be enjoyable, even celebratory. But it’s also a complex process involving different stages and a lot of moving parts. Escrow – the time between an accepted offer and closing – is particularly important for both buyer and seller, and understanding this process is essential for both parties. These tips will help you smoothly navigate escrow and avoid any surprises on your way to a smooth transfer of ownership.
Buyer’s Guide: Your Offer Has Been Accepted – Now What?
Once an offer has been accepted, your earnest money will be placed in escrow. In most cases escrow lasts between 30-60 days and, along with your broker, you’ll be scheduling an inspection, appraisal and final walk-through.
@properties Christie’s International Real Estate managing broker Rose Dobbins suggests writing into the contract any requests for additional visits to the home. If the seller agrees, use this as an opportunity to meet with your contractor or to measure space for furniture and window treatments.
This is also a great time to set up your utilities and insurance policies and schedule movers. A suggested caveat is to wait until the inspection and appraisal have been completed before you go full steam on your to-do list should anything fall through.
It is also very important to avoid opening new credit lines and to stay current on all of your bill payments through your closing, as any changes in your credit profile can negatively impact your mortgage loan approval. Because your employment and income will be verified, switching jobs during this period is also not recommended.
If a job change is unavoidable during a home purchase, Kyle Gillespie, senior vice president of mortgage lending at Proper Rate, recommends alerting your lender as quickly as possible. “If we can obtain an employment offer letter that outlines the new salary and start date, there are generally no issues so long as there is enough time to run it through underwriting,” he said.
Seller’s Guide: You’ve Accepted an Offer – Now What?
You may be under the impression that since you’ve accepted an offer and escrow has begun, you can relax about keeping your home in showing condition. However, you should be prepared for an inspection and appraisal, which still requires you to have your home ready to be viewed, maybe even with a more discerning eye than a potential buyer’s.
Neither a home inspection nor an appraisal are mere formalities, and each should be approached with care. Unless the home is being sold “as-is,” the mechanical systems should be in working order. Your home should also appear clean and clutter-free — an added benefit should your listing need to be reactivated.
It’s also helpful to be ready with any required documentation, disclosures, or homeowners’ association information as they will need to be shared with the seller and/or their attorney.
Another detail that can’t be overlooked is the final walk-through. This gives the buyer an opportunity to see that you’ve left the property in the agreed-upon condition. Typically, it occurs just before closing and you’ll need to have everything moved out along with necessary repairs, paint touch ups and cleaning taken care of. Ignoring these steps can hold up the closing.
Escrow is meant to protect both buyer and seller and following these guidelines can make for a positive experience during one of life’s biggest milestones.