Once all of the terms and conditions of the real estate sales contract have been met, the real estate transaction may be “closed”. Real estate closings take place at the offices of the lender, the buyer or seller’s attorney or broker, or most commonly, at the title company. Runkel Abstract & Title Co. is responsible for hundreds of closings each year, and combines many years of experience together with the latest technology to the closing table.
At the closing, the buyer and seller meet to exchange the purchase price for the deed and various other ownership documents. Numerous other documents, many related to the buyer’s financing, are also typically executed at the closing. When the new lender is satisfied that its requirements have been met, it funds the transaction, providing money to the title company for the buyer to complete the purchase. In the event that all requirements are not able to be met, all parties may agree to hold an escrow to allow the closing to be completed.
Every escrow is unique and most are more complex than explained here. If you have questions about the escrow process, we suggest you contact an escrow officer or attorney to obtain detailed advice and further explanation.
Runkel’s recently renovated facility features 8,200sq ft of finished office space with four closing rooms to accommodate everything from refinances to large commercial real estate transactions. To make sure that your closing goes smoothly, Runkel gathers all tax prorations, new construction assessments, general pay-off amounts and escrow agreements assuring that everything you need for your closing is at your closing.
An escrow is an arrangement in which a disinterested third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer's and seller's instructions.
People buying and selling real estate often open an escrow for their protection and convenience. The buyer can instruct the escrow holder to disburse the purchase price only upon the satisfaction of certain prerequisites and conditions. The seller can instruct the escrow holder to retain possession of the deed to the buyer until the seller's requirements, including receipt of the purchase price, are met. Both rely on the escrow holder to carry out faithfully their mutually consistent instructions relating to the transaction and to advise them if any of their instructions are not mutually consistent or cannot be carried out.
An escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan commitments and funds, deeds, and many other items, using the escrow holder as the central depositing point. If the instructions from all parties to an escrow are clearly drafted, fully detailed and mutually consistent, the escrow holder can take many actions on their behalf without further consultation. This saves much time and facilitates the closing of the transaction.
The escrow holder may be any disinterested third party (although some states require that certain escrow holders be licensed).
There are two important reasons for selecting an established, independent escrow firm, an attorney, or an escrow officer with a bank, S&L or title insurance company. One is that real estate transactions require a tremendous amount of technical experience and knowledge to proceed smoothly. The other is that the escrow holder will generally be responsible for safeguarding and properly distributing the purchase price.
Escrow officers with established firms generally are experienced and trained in real estate procedures, title insurance, taxes, deeds and insurance.
Once all the terms and conditions of the instructions of both parties have been fulfilled, and all closing conditions satisfied, the escrow is closed and the safe and accurate transfer of property and money has been accomplished. Most problems occur when one party is under the understanding that all terms and conditions have been met, but the other party is not agreeable to it. When there is an objection, Runkel is responsibility is to safeguard the funds.