If you are an out of state Los Angeles home buyer the process may be different if you have bought a home in another State. In fact it probably is.
California is an escrow state. What is Escrow? Escrow is a neutral party acting between the buyer and seller in the homes sales process. They are provided the terms of the contract and ensure that all terms are abided by and completed before any funds and title change hands. No attorneys are involved and there is no “closing table”.
Upon the execution of the purchase contract the buyer will need to remit their good faith deposit to escrow within three business days. This may be in the form of a personal check although for an out-of-state buyer it is usually wired in.
Escrow instructions will be sent to the buyer, seller and their agents with all the terms of the contract laid out including timelines for removing contingencies, such as inspection, appraisal and loan approval. These instructions will need to be approved by both buyer and seller. If there are any changes during the course of escrow, such as extension of the escrow period, the escrow officer will issue an amendment to be signed by both parties. Nothing is allowed to be changed throughout the process without the agreement of both buyer and seller.
There are mandated items which need to be in compliance depending on which City you are in. Escrow will need to receive confirmation that those items meet City standards. The seller is responsible for those and will order the relevant contractors to ensure compliance. If a termite inspection and resulting treatment by the seller is part of the contract, the inspection and completion certificates will need to be delivered to escrow.
During the course of escrow paperwork will be sent to the buyer and seller for signature and need to be addressed promptly. There will also be paperwork sent from your real estate agent. These are mostly State-required disclosures and are separate from the actual escrow process. Escrow is only concerned with the terms of the initial purchase contract and any counter offers and addenda.
The buyer’s responsibility is to conduct investigations and either have any concerns addressed or remove your contingencies if they are satisfied.
The mountain of paperwork a buyer will be faced with when buying a home in Los Angeles can be daunting, but much of it is State disclosures. Escrow cannot close until ALL the terms of the signed agreement have been met, including clean title. Make sure you understand the terms of the purchase agreement you are signing as the whole escrow process revolves around that.
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