The Escrow Process & the Expectations of Those Involved

Understanding the Escrow Closing Process

It is helpful to know that “closing” does not mean the day the buyer signs loan documents, and it does not mean the day the loan is funded by the lender. Escrow closes on the day that the Grant Deed is recorded in the official records at the County Recorder’s office. Once that document is date-stamped by the County Clerk, ownership of the property has officially changed hands.
Understanding how much time to allow for the final closing process will help reduce some of the stress and frustration that can accompany closing and escrow.
  • The lender gives final approval and is ready to “draw docs”. From there it may take up to 48 hours from the time the final approval is given until the documents are received by the Escrow Officer.
  • The Escrow Officer then contacts the buyer and sets an appointment to sign the documents. From there, the Escrow Officer “packages” all documents and returns them to the lender usually the day after the buyer signed them.
  • You should allow up to 72 hours for the lender to check the documents in and review them. Once final review is completed, the lender will issue the funds to the Escrow Company. Recording of the Grant Deed is scheduled for the next business day after the funds are received.
  • The Grant Deed is taken to the County Hall of Records by a Title Insurance Representative. Once the county clerk stamps it with a date and document number, closing is complete.
  • The title company notifies the Escrow Officer and transfers all funds they are holding from the lender to the escrow who confirms with the buyer, seller and agents that there is a confirmation of closing.
  • When the Title Insurance Company receives confirmation of recording from their representative at the hall of records, the Title Company will wire transfer all funds they are holding from the buyer’s lender to the Escrow Company.
  • At that point, the Escrow Officer will begin the process of balancing the file and disbursing funds to pay-off the seller’s existing mortgages, liens, and any other payments that the Officer has been instructed to pay through escrow.

What to Expect from the Parties Involved

Once an offer is made and accepted, the escrow process begins. Click the drop-down arrows below for an overview of what to expect from the parties involved.
  • The Buyer(s)
    • Makes an offer to purchase, or accepts a counter offer from the seller, which is accompanied by a good faith deposit.
    • Approves and signs the escrow instructions and other related instruments required to complete the transaction.
    • Approves the preliminary report or title commitment and any property disclosure or inspection report required in the purchase and sale agreement.
    • Approves and signs new loan documents and fulfills any remaining conditions contained in the contract. If necessary, approves any changes by signing amendments in the escrow instructions.
    • Deposit funds necessary to close the escrow.
  • The Lender (if applicable)
    • Accepts the new loan application and other related documents from the Buyer(s) and begins the qualification process.
    • Orders and reviews all pertinent documentation.
    • Submits the loan package to the appropriate committee and/or underwriters for approval. Once approved, loan conditions and title insurance requirements are established.
    • Informs Buyer(s) of loan approval terms, commitment expiration date and provides a good faith estimate of the closing costs.
    • Deposits the new loan documents and instructions with the settlement agent for Buyer's approval and signature.
    • Reviews and approves the executed loan package and coordinates the loan funding with the escrow officer.
  • The Escrow Officer (Western Pacific Escrow)
    • An order is received for escrow and title services.
    • Places order for the preliminary report or title commitment for the subject property from WPE.
    • Acts as the impartial "stakeholder" or depository, in a fiduciary capacity, for all documents and monies required to complete the transaction per written instructions of the principals.
    • Prepares the escrow instructions and required documents in accordance with terms of the sale.
    • Once authorization is received, the escrow officer orders demands on existing deeds of trust and liens or judgments and when applicable, orders the beneficiary's statement or formal assumption package.
    • Reviews documents received in the escrow including the preliminary report or title commitment, payoff or assumption statements, new loan package and other related instruments.
    • Reviews the conditions in the lender's instructions including the hazard and title insurance requirements.
    • Presents the documents, statements, loan package, estimated closing statements and other related documents to the principal for approval and signature, and requests the balance of the buyer's funds.
    • Receives the proceeds of the loan from the lender.
    • Determines when the transaction will be in the position to close and advises the parties.
    • Assisted by title personnel, the escrow officer records the deed, deed of trust and other documents required to complete the transaction with the County Recorder and orders the title insurance policies.
    • Closes the transaction by preparing the final settlement statements, disbursing the proceeds to the Seller, and pays off existing encumbrances and other obligations.
    • Delivers the appropriate statements, funds and remaining documents to the principals, agents and/or lenders.
  • The Seller(s)
    • Accepts Buyer's Offer to Purchase and initial good faith deposit to open escrow.
    • Submits documents and information to escrow holder, such as: addresses of lien holders, tax receipts, equipment warranties, home warranty contracts, any leases and/or rental agreements.
    • Approves and signs the escrow instructions, grant deed and other related documents required to complete the transaction.
    • Orders inspections, receives clearances and approves final reports and/or repairs to the property as required by the terms of the purchase and sale agreement.
    • Fulfills any remaining conditions specified in the contract and/or escrow instructions and approves the pay-off demands and/or beneficiary's statements.
    • Approves final changes by signing amendments to the escrow instructions or contract.
Western Pacific Escrow is a full service closing office providing residential resales, loan escrow and refinance, 1031 tax deferred exchanges and notary services. We dedicate ourselves to working as a team with our clients and all parties involved to accomplish a smooth and enjoyable closing experience. Close your residential transaction with Western Pacific Escrow and receive the quality assistance and excellent service you and your clients deserve.