Real Estate Terms & Definitions You Should Know

    Title/Escrow is a neutral third party depository for legal documents and funds necessary to complete a real estate transaction. The escrow agent will disburse funds and record documents for the proper recipients per their written instructions. “Escrow” also means the period from when the contract is signed to when the Deed is recorded and the property officially changes hands. Escrow must close on a business day and cannot close on a weekend or holiday.

    Inspections:  All real estate sale forms contain inspection clauses.  Typically, the transaction is made contingent on the buyer in some way “approving” of the condition of the property as revealed in an inspection report or after a “due diligence” period.  During this period, the buyer will have specific inspections completed. The inspections will give the buyers information as to the condition of the property. After that time, the buyer and seller will negotiate any possible repairs, request a credit towards closing costs and pre-paids or will “approve” the inspections without any requested repairs.

    Utilities: These services will need to be transferred into the buyer’s name at the close of escrow. These utilities could include water & sewer, electric, natural gas, phone, cable or satellite TV, internet, trash collection and security/alarm systems, when applicable.

    Taxes: Property Taxes are typically levied on an annual basis effective January 1st and become due and payable on June 30th (each jurisdiction may be different). This is one of the items the escrow officer will provide prior to closing. Using these dates, this means that property taxes are payable six months after they become owing and cover six months into the future when paid on June 30th.

    Closing/Signing Appointment: What is the difference between “signing” and “close of escrow?” Escrow will receive loan documents (if applicable) from the buyer’s lender and will prepare them for the buyer to sign along with final statements and any other required documents. Signing of both parties will take place no more than 3 days prior to the close date.

    BE SURE TO BRING: Photo ID & Check book or cashier’s checks. The escrow company will let you know if you need to bring anything else.

    Close Date or Close of Escrow:  This is the date that sale is recorded with the local government, and the purchase funds have been received by the seller, ownership of the home is transferred to the buyer.  Escrow will have the proceeds available either the afternoon of the close of escrow, or the following business day, depending upon the date/time the Deed is recorded.

    Occupancy & Possession: Unless otherwise contracted to extend possession of the property beyond the close date, all occupants of the premises & their personal property must be out of the home by 5:00pm on the closing date. Sellers should leave the home in “broom clean” condition, unless otherwise negotiated, and copies of all keys, garage openers and manuals should be left at the property for the buyer.

     

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