Escrow: Now What?
Congratulations, you are on your way to owning your very own home! What's next? Below are some suggestions to help the escrow and settlement go as smoothly as possible. Of course, work with your realtor, and follow their advice - they will assist you every step of the way.
You will be asked for a down payment on the Westchester County home that you are purchasing. You can choose to put down as much or as little as you want (depending on your mortgage), but it is good to remember that the more you put down toward the total price of your home, the less time it will take you to pay off and the less your mortgage payments will be every month.
During this period of purchasing your home, there will be an escrow or settlement company to act as an independent third party so that you know when and who to give your money to, to get the deed to your new home. The escrow or settlement company will hold your deposit and coordinate much of the activity that goes on during the escrow period. This deposit check may also be held by an attorney or in the broker's trust account. Make sure that there are sufficient funds in your account to cover this check, because the check will be cashed and held in escrow.
Assuming the sale goes through, this money will be applied to the purchase price of the home. If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back, less standard cancellation fees. In certain instances, the seller may be able to retain this money as liquidated damages. Prior to executing a purchase contract, it would be wise to speak with your counsel regarding whether or not it is your best interest to have a liquidated damages clause as part of the contract. Hire Realty LLC will help you understand and go through, this process.
Call Hire Realty LLC with any questions about the home buying process. We will guide you, every step of the way. 914-458-5677
The period that you are "in escrow" is often 30 days, but may be longer or shorter. During this time, each item specified in the contract must be completed satisfactorily. By the time you have opened escrow, you have come to an agreement with the seller on the closing date and the contingencies. Each contract is different, but most include the following, and again, the professionals at Hire Realty LLC can assist you with understanding who does what during this process:
1. Inspection contingency: this should be completed as soon as possible after the contract to purchase is signed, as unsatisfactory results of the inspection may mean that you will want to cancel the contract.
2. Financing contingency:
Once the contract is signed, you have a period of time to secure funding. If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you may lose the chance to purchase the house. The seller will then have the option of selling the house to the next prospective buyer. This is why the PreApproval
process is so important.
3. A requirement that the seller must provide marketable title. Your mortgage company or title company will conduct a Title search to ensure there are no liens or encumbrances on the property you are buying.
4. Secure homeowner's insurance. This will probably be required by your lender, before you can close the sale. Due to such requirements as special fire and earthquake insurance, obtaining this insurance may require a lengthy period of time. It would be in your best interest to apply for insurance as soon as possible after the contract is signed.
5. Contact local utility companies - be sure to schedule to have service turned on when you close escrow.
6. Schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. What you thought to be a "permanently attached" chandelier that would come with the property might have been removed by the seller and replaced with a different fixture entirely.
Once everything is done, and you've had a successful closing, you've made it! You are now the proud owner of a new home in Westchester County. Congratulations!