Choosing an Escrow Agent or Title Company
You will want your transaction to go off without any hitches. A smooth closing is essential. Therefore, use care in choosing who will act as your closing (escrow) agent.
Your first consideration would normally be to consider only those who are experienced professionals would good references. Spend some time talking with them, asking questions, such as their experience with FSBO transactions and discovering the ease with which they work with you. In short, you not only want a knowledgeable pro, but one you feel comfortable with, because you will be spending a lot of time with him - escrow can take from 30 to 90 days. If the you and the agent "hit it off", talks in terms you understand, and his references speak highly of him, that is the one you want.
Whereas you will likely make numerous trips to the escrow agent's office, it should ideally be within a comfortable distance from your home. Long trips to an agent's office can add more stress, and you don't need any more of that.
You will also want to discuss the agent's fees. Fees can vary. Get answers on what his fees are, who will be responsible for which those fees (buyer or seller). You should receive a breakdown listing and describing each fee, and which party is responsible for it.
Escrow agents take care of most of the paperwork, ensure all terms of agreements are complied with and distribute the funds accordingly. They will also:
* get instructions and loan documents from the buyers lender
* order the preliminary Title Report
* secure payoff demands from existing lenders, requesting full reconveyances of any deed of trust or mortgages to be paid off at closing
* obtain documents necessary to clear any and all outstanding liens on the property
* issue receipts for deposits and hold those deposits in a separate escrow account
* prorate taxes, rents (if any), interest etc.
* prepare escrow instructions per buyer & seller
* determine the date that escrow will close
* obtain Title Insurance on behalf of the buyer or his lender
* assuring timely transition of fire insurance
* record all necessary documents, such as deeds, reconveyances, powers of attorney (if used)
Depending on the terms of the agreement(s), the escrow agent may perform other tasks necessary to execute the terms of those agreements.
When all is said and done, closing - or settlement - can occur. At this time, you and your buyer will sign your names so many times, on so many documents that your hand will get tired.
Note that most escrow agents will require that checks brought to closing for down payments, escrow fees etc. Be in the form of a cashier's check. Most will not accept personal checks, so make sure your buyer is aware of this, to prevent unnecessary delays.
If either party, for reasons unknown, shall be unable to attend closing, that party can issue a Power of Attorney to have someone else take his place at closing, and sign all papers. Another method is to have the escrow agent send the documents ahead, to be signed in advance of closing.
Closing documents that you will be required to read should be examined carefully, preferably before closing, to check for any errors in the wording or the math.
NEXT: Seller's Checklist