CA_Principles_12[1]

CA_Principles_12[1] - Principles of California Real Estate...

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1 Copyright 2004- 2006 Rockwel Publishing Lesson 12: Closing Real Estate Transactions Principles of California Real Estate Copyright 2004- 2006 Rockwel Publishing Closing » Closing : The final stage in a real estate transaction. Also called settlement. Buyer pays seller purchase price. Seller transfer title to buyer. Copyright 2004- 2006 Rockwel Publishing Escrow » In California, the closing process is usually handled through escrow . » Escrow : An arrangement in which a neutral third party holds money and documents for the buyer and seller until the transaction closes.
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2 Copyright 2004- 2006 Rockwel Publishing Escrow Escrow agent » Escrow agent : Neutral third party selected to handle closing; also called closing agent. Chosen by agreement between buyer and seller. Often appointed in purchase agreement. Acts as a dual agent, representing buyer and seller. Copyright 2004- 2006 Rockwel Publishing Escrow Escrow instructions » The parties usually give the escrow agent written instructions for the closing, which: direct escrow agent to take necessary steps to close the transaction specify conditions that must be met before escrow agent releases funds or documents reflect the contingencies and other requirements in the purchase agreement Copyright 2004- 2006 Rockwel Publishing Escrow Escrow instructions » If there is any conflict between the escrow instructions and the purchase agreement, the later contract (the escrow instructions) prevails.
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3 Copyright 2004- 2006 Rockwel Publishing Escrow Services » Escrow agent may provide many services, such as: ordering title report and inspections preparing documents paying off seller’s loan and other liens prorating and allocating expenses depositing and disbursing funds preparing Uniform Settlement Statements delivering and recording documents Copyright 2004- 2006 Rockwel Publishing Escrow Services » Although an escrow agent may provide a range of services, the scope of those services is quite limited. An escrow agent may have authority to schedule an inspection, but can not discuss the results or order repairs. Copyright 2004- 2006 Rockwel Publishing Escrow Purpose and benefits » The main purpose of escrow is to ensure that the: seller receives purchase price buyer receives clear title lender’s security interest is perfected
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4 Copyright 2004- 2006 Rockwel Publishing Escrow Purpose and benefits » Escrow’s main benefits are: Convenience: Neither party is required to attend the closing in person Protection: Each party is protected against a change of heart by the other party § A deposit into escrow is essentially irrevocable. Copyright 2004- 2006 Rockwel Publishing Escrow Purpose and benefits » Once a party has placed a sum of money or a document in escrow, he or she can’t get it back except: according to the conditions set forth in the escrow instructions, or with the other party’s consent. Copyright 2004- 2006 Rockwel Publishing
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This note was uploaded on 09/06/2011 for the course FI 365 taught by Professor Staff during the Spring '11 term at S.F. State.

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CA_Principles_12[1] - Principles of California Real Estate...

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