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Escrow Instructions and the Closing

There are a number of documents that you need to sign in order to finalize the sale of your house. The list below has been prepared by our experts to help you feel more confident with your closing.

1. Escrow instructions, if applicable

Escrow instructions are a consolidation of instructions from all parties involved in the sale that are needed to finalize the transaction. Please note that this may be less common in your state: for example, those in Florida have instructions dictated by the contract. For those in California, typically the California CAR Residential Purchase Agreement is also the joint escrow instructions from the parties to escrow. Sometimes additional escrow instructions are needed to finalize the transaction. They are prepared by your escrow officer and signed off by you (the seller) and by the buyer.

2. Settlement statement and Closing Disclosure

The estimated ALTA settlement statement will reflect all the costs of the transaction and will show what your proceeds of the sale will be. In addition, you will also be asked to sign the Closing Disclosure: this document is regulated by the CFPB (Consumer Financial Protection Bureau).

3. Grant / Warranty Deed

A Grant/warranty Deed is the document that transfers title of the property from you (the seller) to the new owner (the buyer). This document needs to be signed at closing before a company-approved notary public, which is either your escrow officer or a Doma approved notary. You are required to supply current and valid picture identification to the Notary Public before you can sign the Grant/warranty Deed. Your escrow officer or real estate agent will contact you for an appointment to sign your closing documents and Grant/warranty Deed.

4. 593/1099-S/FIRPTA affidavit

Escrow or settlement agent is required by state and federal regulations to obtain additional information and forms from you. These forms may require you to seek counsel with your tax advisor or an attorney. Escrow officers are prohibited from providing you with legal advice regarding these forms.

The Signing

When the buyer’s loan is approved, the loan documents will be sent to escrow or settlement agent where the file will be prepared for signing. Your escrow officer or closer will contact you when it’s time to sign all the paperwork. When done entirely in person, the process takes about one hour on average– however you may be offered a digital signing option. If you wish to proceed digitally, you may be able to expedite the in-person event and be more prepared for the remaining documents that require signing in front of a licensed notary.

For in-person signings, please bring one of the following forms of valid identification to your closing:

  • A current (non-expired) driver license
  • Passport
  • State ID Card

One of these forms of identification must be presented at the signing of escrow for the signature to be notarized. On occasion, funds may be insufficient to close escrow and you, the seller, will be asked to deposit money into the escrow account to complete the sale. Should this situation occur, you will need to obtain a cashier’s check made payable to the title company or secure a wire funds issued by your bank/credit union, in the amount indicated to you by your escrow officer or closer.

Paying off your existing loans

To close the sale, escrow will facilitate the payoff of any existing loan(s) encumbering the property. To ensure this is done accurately, you will need to furnish information about all existing loan(s) to your escrow officer. For each loan, please provide the lender’s name, loan number, and contact information. Your escrow officer will need this information to order the loan payoff demands so the loan(s) may be paid off correctly at the close of escrow.

Disclosures and contingencies

During the process of selling your property, you will be asked to fill out a property disclosure form that is required by law. In this document, you will inform the buyer of any significant facts you have about the condition of the property, including any homeowners’ association information. There will be various contingency dates in your real estate sales contract. You should be aware of these and work with your real estate agent to perform the required actions in a timely manner. Contingencies may include the buyer’s loan approval, approval of the preliminary title insurance report, and completion of structural, pest control, and other inspections.

This article is part of the Home Seller Guide.