Escrow: Now What?
Congratulations, you are on your way to owning your very own home! Follow these suggestions so that escrow and settlement with go as smooth as possible.
You will be asked for a down payment on the home you are purchasing. Typically this is 3% of the purchase price.
During this period of purchasing your home, you are going to need an escrow company to act as an independent third party so that you know when and who to give your money to get the deed to your new property. The escrow or settlement company will hold your deposit and coordinate a lot of the activity that goes on during the escrow process. Make sure that there are sufficient funds in your account to cover this deposit.
The deposit check will be cashed. Assuming the sale goes through, this money will be applied to the purchase price of the home. If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back, less standard cancellation fees. The typical contingency period is 17 days in which you will have time to review HOA docs, building inspections, loan docs, etc.. During this time, if you find anything you are not happy with and do not wish to go through with the sale, you will be able to cancel and get your deposit back. In certain instances, the seller may be able to retain this money as liquidated damages.
2. Financing contingency: once the contract is signed, you have a period of time to secure funding. Typically we ask for a 30 day contingency period on this one. If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide if you want to remove the contingency and take your chances on getting a loan. You may choose to cancel the purchase contract if you can not secure the loan.
3. A requirement that the seller must provide marketable title. The title must be "clear" to ensure that you do not have legal issues regarding your ownership. You will be able to review the title to ensure there are no leins on the property of any kind.
4. HOA contingency: This applies to condo complex's or residential areas that are part of a homeowners association. These documents will come from escrow typically about 2 weeks after opening escrow and will pertain all the information regarding HOA policies, CC&R's and budgets. If for some reason you are not satisfied with the HOA documents you may choose to cancel the purchase.
5. Secure homeowner's insurance. This will probably be required before you can close the sale. Due to requirements as special fire and earthquake insurance, obtaining this insurance may require a lengthy period of time. It would be in your best interest to apply for insurance as soon as possible after we open escrow.
Contact local utility companies to schedule to have service turned on when you close escrow. I will provide you with a list of local utility companies.
Schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. What you thought to be a "permanently attached" lighting that would come with the property might have been taken out by the seller and replaced with a different one entirely. If you can't make it to Mammoth for this inspection, I will do this for you.
You've made it! Once the sale has closed, you're the proud owner of a new property in Mammoth Lakes! Congratulations!