Escrow is critical in the smooth running of this process. Hopefully, after reading the list below you will have a better understanding of what you are getting for your money when paying for Escrow services. Obviously, you don't need to know all this stuff but it is worth a read.

Step 1: the purchase and sale agreement (sales contract)is signed by all parties and delivered to escrow

Step 2: Preliminary Title Report is ordered from a Seattle Title Company by the seller's agent.
The purpose of this step is ensure that the seller has claim to a marketable title. In other words, does the seller have the right to sell the home or is he trying to pull a fast one on his wife (who is also on the title) is away on vacation. Title is proof of ownership, just like the title to your car.

Step 3: copies of Title Report are sent to all parties along with letters of inquiry.
Letters of enquiry are sent to you and the seller by escrow requesting specific information relative to the transaction.  For example, the seller would be asked if there is a mortgage(s) on the property and who the lender is.

Step 4: escrow determines what payoffs are necessary to clear title

Step 5: loan documents from the buyer's lender are received and reviewed. Escrow is making sure you have secured a mortgage from a lender and that the amounts will cover the purchase price.

Step 6: closing documents are prepared including a settlement statement. Closing documents are the closing instructions prepared by Escrow based on information provided by all parties.Closing statements are detailed and individualized itemizations (cash accounting) of the various transactions that are provided to all parties in the transaction.

Step 7: individual appointments are made with you the buyer and the seller to meet with the escrow agent. In Washington State, the buyers and the sellers will meet with Escrow separately to sign a bunch of paperwork.

Step 8: the buyer's loan documents are signed and returned to the lender for funding approval. The lender must approve the signed loan documents before funds are made available.

Step 9: Original Deed and Deed of Trust are sent to the County Recorder.
A deed is an instrument that is used to transfer title from one person to another.

Step 10: the document(s) are recorded with the County Recorder.
It is critical that this is done as soon as possible so that your claim to your new home is recorded and the public is made aware that you are now the new owner. For example, this would prevent the seller turning around and trying to sell their home to a second buyer since the title would be recorded with your name on it.

Step 11: funds needed to close are received from the lender and buyer.
The funds from the buyer would be earnest money (good faith deposit) and closing costs.

Step 12: funds are disbursed (distributed) to clear title, pay the seller, and closing costs.

Step 13: final Closing Statements are mailed out to the buyer and seller.

Step 14: Reconveyance is recorded when received loans from party(s) are paid off.
When an obligation, such as a mortgage, has been secured by a Deed of Trust and has been paid in full, a Reconveyance is recorded with the County to remove it from public record.

Step 15: and finally, the new owner's (the buyer) Title Policy is mailed out.

Step 16: enjoy your new home.


The most important things to keep an eye during closing.
When it comes to escrow and closing, there a number of items that you absolutely must keep an eye on. It's your money!

You will get a call from your Seattle escrow office to attend the closing, which means that you will come in and sign a mountain of paperwork. In the escrow office, you will sit on one side of the table and the escrow agent on the other side. The escrow agent will be putting various forms in front of you to sign, while they read them upside-down, having years of experience doing so.

The agent's catch phrase will be "sign here please". Each form will merge into the next as you slip into a signing frenzy.

Slow down and take your time, especially if you are a first time buyer. Don't be afraid to ask questions if you don't understand or feel comfortable with something. Your Seattle real estate agent should be willing to attend the closing if you ask them.

The day or so before closing:
• Truth-in-Lending Statements (TIL): The day before closing, your lender must provide you with a copy of all your closing costs in a form referred to as a Truth-in-Lending statement. This will list your APR, amount borrowed, type of mortgage, points and origination fees as well as whether there is a pre-payment penalty. Study this document like your life depends on it. Are these the terms you agreed to or has the broker / lender pulled a fast one. You should review this with your agent.

• Closings costs: the day before closing or sometimes a couple of hours before, escrow will call you to tell you how much you will need for closing costs. You will need to ensure that you have sufficient and accessible funds in your bank to cover this. You will be asked to bring a banker's check or bank draft made out to the escrow company. Allow yourself enough time to get to the bank to withdraw the funds.

• The day before closing, do a pre-closing walk through the property with your agent. A few weeks may have passed since you did the initial inspection and you want to make sure that the home is still in the same or better condition. There could have been a fire or flooding. You will also want to check that the sellers have left the items that were agreed to in the sales contract, e.g. oven, fridge, built-in bookshelves or a hot tub.


While at the closing:
• Bring your driver's license, the check to cover closing costs as well as a copy of your last TIL.

• Make sure your pre-printed name is spelled correctly on the forms.

• Make sure the correct address is listed for the Seattle property you are purchasing.

• When you get to the Settlement Statement and the Note, put your pen down, pick up the forms and review carefully. The Settlement Statement lists all your closing costs while the Note will list the terms of your mortgege. Compare the numbers on these forms to the information from your Truth-in-Lending statement. Do they match? Check the APR, type of mortgage, pre-payment penalties and closings costs. These documents have the greatest financial consequences so treat them as such. Not a good time for blind faith. Human, and other, errors can occur.

• After you have signed the mound of documents, do not leave the Escrow office without getting photocopies of the paperwork you have just signed. Blank forms are of no use. Most competent escrow companies will make copies without you needing to ask.

You are now free to leave the building and resume your life and wait to take possession (get the keys) which could be on the same day.


Continue to Buyer's step 7.  Show me the keys!

 Returen to Buyer's step. 5.  Making and negotiating offers