Frequently Asked Questions - Escrow

A title company will hold funds and documents until the property is recorded with the county. In some countries or some East coast states, this task is done by a lawyer. During escrow, the title company finds any/all the liens on the property so that the seller (bank) can pay them off. Once all liens are removed, a "clear title" is conveyed to the buyer.

Yes. Typically there are contingencies in the deal that have to be met in order to close. The most common is "due diligence" which means we have a period of time to do inspections and confirm that we want the property. The second is "appraisal" which means that if your lender appraises the property and it comes in less than the purchase amount, the appraisal is "busted." A buyer can get out of deal if those contingencies are not met.

You are insured against liens on the title. For example, if some general contractor stepped forward and declared he wasn't paid for a repair, it would be title's responsibility to pay the general contractor up to the insurance amount.

Generally about 2% of the purchase of the property. When you go into escrow, we will providing you with a "net sheet" which breaks down your estimated fees. A few days before we close, you will get an accurate breakdown of fees.

Usually no. Unless the property is privately owned, you will be forced to use the seller's title company. The good news is that most title companies are within nickels of each other so this battle isn't worth fighting.

Here are some ballpark numbers for you:

 

• Cash Deals (2-3 weeks)
• Conventional Loans (4-6 weeks)
• Short Sales (6 weeks - 2 years)

Fill out paperwork.	There is a ton of paperwork. If you don't have a printer and a fax/scanner , we are going to have major problems. There will be about 50 pages worth of documents to be faxed back and forth. Many of these are time sensitive.
Inspect Property	This is a major step of the process and we do not recommend you skip this procedure. Our inspectors charge $300 and it has saved dozens of investors from catastrophe.
Generate Estimates	While we are there, we will generate estimates for repairs so you can see what we think should be done with the property. You are welcome to get a different opinion and/or do your own rehab.
Market the Property	Unlike many of our competitors, we start marketing the property the day after it is inspected. Our goal is to have a tenant lined up when we close escrow.
Create Transfer Processes	If you don't have a US Bank account yet. This is the time to make sure we have one. This will be used to receive payments.