Buying or selling a home can be an exciting but often overwhelming process. One crucial aspect of this journey is the escrow timeline, which plays a vital role in ensuring a smooth and secure real estate transaction. 

In this guide, we’ll take you through the step-by-step process of the escrow timeline, helping you understand what to expect when closing on your home.

Opening escrow

The escrow process starts when you and the other party (buyer or seller) agree on the terms and conditions of the sale or purchase and sign a purchase agreement. You will then work with an escrow company, which is often also the title company conducting the settlement process, and they will create an escrow account on your behalf. The earnest money deposit is collected from the buyer and deposited into the escrow account.

Title search and preliminary report

The title/escrow company will then initiate a title search to ensure there are no outstanding liens or other defects surrounding the property’s title. A preliminary title report will be provided to both parties for review, highlighting any potential title issues.

Inspection period

The buyer will usually have a specified time to conduct inspections, which may include a home inspection, pest inspection, and more. If any issues are found, negotiations may occur for repairs or credits from the seller. This time period is written and disclosed in the contract.

Appraisal 

The mortgage lender typically orders an appraisal to determine the property’s market value.

If the appraisal comes in lower than the purchase price, further negotiations may be needed to adjust the sale price or terms.

Loan approval

The buyer’s mortgage lender will review the loan application, credit history, and the property’s details. This process may involve additional documentation and underwriting, and final loan approval is needed before moving forward.

Final walk-through

The buyer may conduct a final walk-through to ensure the property is in the agreed-upon condition and that any negotiated repairs have been completed.

Loan funding and closing

Once the loan is approved, the lender will send the funds to the escrow account. The title/escrow company will prepare the necessary documents for both parties to sign, including the deed and the settlement statement. The buyer and seller will meet, typically at the title company’s office, to sign the documents. The buyer will provide the required funds for their down payment and closing costs.

Recording and funding

After all parties have signed the necessary documents, the buyer’s settlement office will send them to the city/county recorder’s office for official recording.

Disbursement of funds

The title/escrow company will ensure that all payments, including the seller’s proceeds and commissions, are distributed according to the terms of the agreement. It’s important to note that the buyer’s settlement office is responsible for dispersing the funds to the appropriate parties.

Closing

Congratulations! You’ve successfully completed the escrow timeline, and the property is officially yours.

Understanding each step in the closing and escrow timeline can help you navigate the process with confidence. For additional information about real estate closings in Virginia Beach, VA, please contact Linear Title & Escrow today.