What Escrow means when buying home in Phoenix AZ?
You finally found your dream home, your Real Estate Agent had worked hard negotiate the best price, best terms and conditions. Now, I am the home owner right? Not so fast.
Once purchase contract is accepted by Buyer and Seller, the next step of home buying process is Escrow Process.
Escrow Process
Escrow is the period between the time a home enters into a purchase agreement (contract accepted by buyer and seller) and when the property title transfers to the new owner (recorded with county).
So What is Escrow?
The purpose of the escrow process is to act as a neutral third party between the buyer and seller and to make sure all the required steps toward closing are completed correctly and on time.
Escrow Officer or Escrow Agent
The escrow process is handled by neutral third party known as an Escrow Officer or Agent. In Arizona, the escrow agent typically a personnel with an escrow company. The escrow officer must follow the instructions of both parties (buyers and sellers) involved in the transaction. The escrow officer will and must remain unbiased and rather formal when dealing with all of the parties associated with the escrow. Escrow officers are there to safeguard documents, follow instructions and make sure everything is filed timely. They’re not responsible to provide advice to buyers.
An escrow agent performs the following tasks:
- How the escrow officer will receive and hold the buyer’s earnest money for the purchase of the property
- The specific time frame agreed by the buyers and sellers for the transaction to close
- Obtains and holds the deed from the seller transferring the property to the buyer and arranges for the deed to be recorded in the appropriate office at closing
- Particular requirements or specific actions that are to be performed by either party. For example contingency (if any), the escrow officer cannot close the transaction until all contingencies have been fulfilled and satisfied
- The authorization for the escrow officer to distribute funds for title insurance, real estate commissions, recording fees and other costs that arise for the transaction
- Determines the amounts that both the buyer and seller owe at the time of closing for items such as property taxes
- The most important job for escrow officer is to ensure the title and clean and clear before transferring to new buyer. If the escrow officer’s examination of the title report discloses any lien against the seller or any lien for which the seller is responsible. The escrow instructions usually provide that a portion of the purchase price can be withheld from the seller and used to pay these liens and clear title so the transaction can be closed
Once the Escrow Agent completes the tasks that they were instructed to perform, including recording the deed in the buyer’s name, paying the seller for the transaction, and disbursing all other funds, escrow is then considered closed.
In Arizona, after deed has been recorded to the county, Escrow Agent will say the magic word “It is recorded” and inform both Buyer Agent and Listing Agent. Congratulation, now you officially home owner.
Escrow Fees
Escrow fees charged by the escrow agent are typically split between seller and buyer. Seller will pay his/her share as part of seller’s closing cost and buyer will pay his/her share as part of buyer’s closing cost. If a buyer is with VA loan, escrow fees are the sole responsibility of the seller, as new VA financing is not allowed to pay any escrow fees.
New Listing in Last 24 hour Phoenix AZ
Search and view your dream home your way
Receive email alert as soon as a Phoenix property matching your criteria hits the market. Be one of the first to see new listings. Simply type in everything you want in a house and save your search here to be notified.
