You may often hear of the term "Under Contract" or "Pending Sale" with regard to Real Estate Transactions. The process of completing the purchase of a home is known as the "Settlement" process or "Escrow" process. This is when the the seller and buyer will come together at the Settlement table where documents are signed and exchanged, the keys are handed over, and possession is taken over by the buyer (unless your contract states otherwise). There may be a settlement attorney who facilitates this process.
Once you have an executed Agreement of Sale on the property you are selling, the buyer’s agent or lender (if buyer is financing) will send your signed agreement and any other pertinent details to a title/settlement company or an attorney who handles real estate title closings to start the title and settlement process. The title/settlement company is chosen by the buyer.
How does the settlement process work?
The settlement company or escrow officer takes instructions based on the terms of your purchase agreement and your lender’s requirements. Other elements of the escrow include hazard insurance, title insurance and preparing the deed from the seller to you. The Escrow process is the process between an executed Contract and Closing. The Escrow process cannot be completed until the instructions (requirements) have been satisfied, and all parties have signed closing documents.
How long is the Escrow period?
The length of an escrow is determined by the terms of the purchase agreement and can range from a few days to several months. On average, it takes 30 to 45 days.
- If you are behind on mortgage payments, this should be disclosed to your Realtor upfront.
- Make sure your photo ID is NOT expired before settlement. You will need a valid ID for closing day!
- If you would like your proceeds to be wired to you (instead of issued in the form of a paper check), you should specify this.
- If the proceeds from your sale need to be split with another party, you should let your Realtor know as soon as you are under contract.
IDX information is provided by the Centre County Association of REALTORS® MLS, exclusively for consumers’ personal, non-commercial use, it may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. All information provided is deemed reliable but is not guaranteed accurate by the Centre County Association of REALTORS® MLS and should be independently verified. No reproduction, distribution, or transmission of the information at this site is permitted without the written permission from the Centre County Association of REALTORS® MLS.
This content last updated on Thursday, May 2, 2024 11:36 PM from BRIGHT.
This content last updated on Wednesday, February 8, 2023 10:00 AM from CCAR.
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