Common Questions

The Escrow Agent acts as an impartial third party who is entrusted with the safekeeping of the documents and funds until all of the conditions of the contract have been fulfilled.

This means that your escrow officer is an unbiased party who can be trusted to assist you through the process with neutrality. The buyer and Seller give the escrow officer written instructions that define the terms and conditions under which he or she is authorized to distribute funds and record legal documents.

Most Buyers and Sellers feel a bit of anxiety as they begin the escrow process. The excitement of finishing the sale negotiations and signing the contract quickly gives way to stress as the parties enter the uncharted waters of the escrow process. Your escrow officer, real estate agent and perhaps your mortgage broker will be your guides as you move through this process. They recognize that for most people, buying and selling a home is the largest single monetary transaction they will ever experience.

Whether you are the Buyer or the Seller, you want assurance that no funds or property will change hands until all of your written instructions have been followed. At the end of the transaction, a Buyer wants the Deed to the property and the Seller wants proceeds from the sale.

1. The escrow officer does not act as a negotiator for the transaction or any term(s) thereof. An escrow officer or employee(s) of SHANNON ESCROW is not a legal counselor and cannot provide you with advice.Remember, the purpose of escrow is to take, and comply with, instructions to carry out the mutual agreement of the principals. In the event of disagreement of the parties, the escrow officer must remain neutral until agreement is reached. The transaction should not be negotiated in the escrow office, nor should an escrow officer become involved in the negotiation.

Closing documents are typically signed at least two days before the Closing Date. Remember, the Closing Date is different from the Signing Appointment Date. The Closing Date is negotiated between the Buyer and Seller at the beginning of the transaction. However, several things could delay that date, including the Lender not approving the loan or not preparing the documents for escrow in time for us to perform our duties. It’s best to stay in close contact with your Loan Officer throughout the loan process, to ensure your file is proceeding according to schedule.

The Buyer and Seller must present identification in a form acceptable to the Notary Public. The identification must be current or have been issued within the past five (5) years.

Common forms of acceptable identification include the following:

1. An Identification Card or Driver’s License issued by the Department of Motor Vehicles.
2. A Passport issued by a foreign government.
3. A Passport issued by the Department of State of the United States.
4. An Identification Card issued by any branch of the armed forces of the United States.

If You’re a Seller

Please bring your Bank Routing, Account Information (account number) and your Forwarding Address.

We will wire proceeds to this Bank Account on the first business day after Closing.

Additionally, we will send a Final HUD Statement to your Forwarding Address. If we are paying off any Loans, your Lender will use this address for follow-up Documentation.

If You’re a Buyer

Please bring your Bank Routing and Account Information (account number).

Most Lenders will provide forms that can completed for automatic monthly loan payments. Also, some HOA’s require automatic payment for HOA dues.

We cannot accept personal checks.

Funds can only be in the form of Bank Checks, or if you prefer, you may transfer the funds electronically via Bank Wire between your bank and our trust account. Please let us know if you would prefer electronic transfer so we can make sure you have all the proper details.

The keys can be delivered to the Buyer when the Escrow Officer confirms that the recording of Legal Documents has been completed.

After the recording of Legal Documents has been completed, all Real Estate Agents are notified and the keys can be provided to the Buyer by their Agent.

When a transaction fails to close, a cancellation agreement must be reached between the parties. This cancellation agreement must be put in the form of a written instruction, just as your contract was. Since the deposit is part of the escrow contract, both the Buyer and Seller must mutually agree to its disposition.

If you borrowed money when you purchased your home or if you have refinanced, it is likely that a Deed of Trust was recorded in favor of your lender. This document gives the lender a lien on your home until you sell your house or pay off the loan.

A Home Warranty Policy is a one-year service contract that protects new homeowners against the cost of repairs or replacement of major household systems and appliances that may break down as a result of normal usage and wear-and-tear. Unlike a Homeowners Insurance Policy which does not provide protection against common breakdowns and malfunctions, a Home Warranty Policy provides this protection, taking care of the many uncertainties and common problems that new homeowners face. A Home Warranty Policy offers a wide range of coverage, including plumbing, heating, electrical systems, fixtures and appliances.

SHANNON ESCROW provides a FREE one-year Home Warranty Policy (standard coverage) to each Buyer on their Purchase/Sale transactions!

The Escrow Agent acts as an impartial third party who is entrusted with the safekeeping of the documents and funds until all of the conditions of the contract have been fulfilled.

This means that your escrow officer is an unbiased party who can be trusted to assist you through the process with neutrality. The buyer and Seller give the escrow officer written instructions that define the terms and conditions under which he or she is authorized to distribute funds and record legal documents.

Most Buyers and Sellers feel a bit of anxiety as they begin the escrow process. The excitement of finishing the sale negotiations and signing the contract quickly gives way to stress as the parties enter the uncharted waters of the escrow process. Your escrow officer, real estate agent and perhaps your mortgage broker will be your guides as you move through this process. They recognize that for most people, buying and selling a home is the largest single monetary transaction they will ever experience.

Most parties enter the escrow process with little or no understanding of what it is or what to expect. The dictionary will tell you that an escrow is defined as a secure and neutral holding place for the documents and funds that are used to complete the transfer of real property. That secure and neutral holding place is your escrow officer who acts much like the hub of a wheel, bringing together all the pieces of your transaction by managing the complex web of documents and funds.

The goal of a good escrow officer is to move the parties smoothly, comfortably, and securely through the process; and in the end, to provide the Seller with a check and the Buyer with a deed to the home.

1. Prepare Escrow instructions and obtain Buyer/Seller signatures, request Seller loan payoff and Homeowner Association information.
2. Open Preliminary Title and review for Title Conditions.
3. Order and receive Loan Payoff Demands, Clear any liens and Review taxes.
4. Receive loan documents, review file to verify all contingencies removed and all conditions met and obtain final Amendments, if any.
5. Figure file, prepare HUD Statement and make appointments with Buyer/Seller for signing of Loan Documents and receipt of Buyers funds.
6. Return Loan Documents to Lender for approval and request loan funds.
7. Forward Legal Documents to Title Company.
8. Lender funds loan and authorizes recording of Legal Documents.
9. Recording Numbers are received and all parties are notified that closing is final.
10. Final HUD Statement is prepared and all checks/wires are issued to all interested parties: Buyer-Seller-Brokers-Agents-Lender, etc.

Information Request Form

The information you provide on the Information Request Form will be used to clear judgments and liens which do not directly affect you or the property. This form also provides Escrow important information about your Lender and other contact information. This information is confidential and will be used to help the title company complete its work or to make contact with you or your Lender. The opening phase of your escrow will progress smoothly if you promptly return the documents sent to you.

If you have questions about any item, call or email your escrow officer. Your escrow officer is well acquainted with the documents and will be happy to explain them to you.

Certification for Utilities Addendum to Escrow Instructions

The final Water/Sewer bill will be paid from Seller proceeds at closing. Both parties to the transaction are required to sign and return this form. Buyer(s) will be responsible for setting up all new utility accounts, pay any set up fees and will be paid by Buyer(s) outside of escrow. Utilities are to include: gas, electricity, garbage, cable, telephone and any other public and private utilities that are pertinent to the purchase of the property.

Property Information Statement/Authorization

Your title insurance company will make a thorough search of the public records along with its process of examining the title to the property. The information you provide will be used to clear judgments and liens which do not directly affect you or the property. This form will provide information about any existing loans you may have on your property and to identify your homeowner’s association. Fully completing this statement will assist in the processing of your escrow and could delay closing if not returned promptly.

Affidavit of Non-Foreign Status

Your signature on this affidavit certifies that you are a U.S. resident. Foreign persons, as defined by the Internal Revenue Service, are subject to federal tax withholding when they sell property. To learn more about how tax withholding may affect you, consult with you accountant, attorney or the IRS. The website for the IRS is www.irs.gov.

1099-S Input Form

The information you supply on this form will be used by your escrow officer to produce IRS form 1099-S.

Certification for Utilities Addendum to Escrow Instructions

The final Water/Sewer bill will be paid from Seller proceeds at closing. Shannon Escrow will hold back $500.00 from Seller proceeds until the final Water/Sewer bill is received and paid. Any surplus funds will be refunded to Seller within 24 hours of final payment.

Do You Have an FHA Mortgage?

FHA Loans are little different than Conventional Loans. Even though FHA Loans have no Pre-Payment Penalty, they do have what’s called accrual of interest for early payoff.

When paying off an FHA Loan, the payoff funds must be received by the Lender no later than the Installment Due Date (the first day of the month). If the Lender receives payoff after the first day of the month, the Lender will charge interest for the whole month. For example, if the payoff is received by the Lender on the 2nd of the month, you would pay interest for the whole month, and not for 2 days.

State Excise Tax

Whenever real estate in the State of Washington is sold or transferred it is subject to Excise Tax, which is a Lien on your Title Policy. The Excise Tax is 1.78% of the sales price of the property. For example, if the sales price is $500,000, the Excise Tax would be $8,900.

Line of Credit (2nd Mortgage)

Your loan could be subject to a Pre-Payment Fee or an Early Termination Fee. The fee varies from Lender to Lender, so please contact your Lender concerning early payoff fees.

Homeowners Associations (HOA) / Planned Unit Developments (PUD)

When you sell a property located in a PUD it could be subject to a Transfer Fee and/or Departure Fee. If you’re selling a Condo or Townhouse, it could be subject to fees from both the HOA and the PUD.

Sewer Capacity Charge or Assessments

As specified by Item 15 of the Purchase and Sale Agreement, the Sewer Capacity Charge or Assessments can either be assumed by the Buyer or prepaid in full by the Seller at Closing.

The final days before the closing of escrow are by far the busiest for the escrow officer and all other parties. At this point, all property disclosures have been delivered, any contingencies to the sale should have been satisfied, and the escrow officer has gathered most of the documents required to meet closing requirements. Buyer and Seller may be making moving plans and the anticipation is mounting.

The announcement that the Buyer’s new loan has been approved is usually the “trigger” that puts the last steps into motion. Here is a brief description of the activities your escrow officer performs to prepare for The Big Day:

• Received Buyer Loan Documents
• Complete a full audit of the escrow file to make certain that all requirements are met
• Prepare estimated closing statements for review by Seller and Buyer
• Forward all documents which must be recorded to the title insurance company
• Return signed loan documents to the lender
• Complete final lender requirements
• Receive final deposit of funds from the Buyer
• Request loan funds from the lender
• Advise the title company that it can proceed with recording

It is not uncommon for the escrow officer, lender, or Title Company to encounter one or two last minute details which must be handled prior to closing. The Seller and Buyer can be of great help by making themselves available during the final week for clearing up these details and signing any documents which might be needed.

General questions about the closing process are best directed to your escrow officer. If a Buyer has a question about his financing, he/she should contact the lender. Any issues relating to the property itself, including move-in dates or condition of the home, can be handled by your agent.

A team of experienced real estate professionals and a cooperative Seller and Buyer are the winning combination as the transaction moves to its conclusion.

The escrow closing day is the conclusion of a process which, over days, weeks or perhaps months has required the cooperation and energy of many professionals and the Buyer and Seller. It is the final moment when the Escrow Officer, much like the “hub of a wheel” ties together the various parts of the transaction and makes final arrangements for the transfer of title from Seller to Buyer.

Just prior to closing the Escrow Officer audits the entire escrow file, provides instructions to the Title Company and formally authorizes recordable documents to be sent to the Recorder’s Office for recording. This can only be done after the Buyer’s loan funding has been authorized by the Lender and Escrow has received all Lender and Buyer’s funds.

On closing day, the Escrow Officer must wait for confirmation of the recording; this usually comes late in the afternoon.

The Escrow Officer will phone all parties to give them the good news. This is the phone call for which everyone has been waiting.

Checks, wires and final closing statements are prepared and sent out the next business morning to all concerned parties.

The escrow closing is an important event in the lives all parties. If you are the Seller, you have your proceeds. If you are the Buyer, you have the keys to your new home. But did you know that there are several post-closing activities which may need your attention?

If you are a Seller, here are some items to consider:

1. Be sure to properly store the documents from you escrow transaction, especially the final closing statement. This document contains important information which you will need for preparation of your tax return.
2. Did your escrow require that funds be held after closing? These funds will be disbursed as soon as the requirements of that hold are satisfied. Contact your Escrow Officer if you do not receive a check in a timely manner.
3. If you paid off existing loans or other liens, you may receive documents which confirm these payments. Keep these in a safe place in case they are needed for future reference.

If you are a Buyer, here are some items to consider:

1. 1. You will receive your Policy of Title Insurance by mail directly from the title insurance company. This important document gives you the assurance that your property is vested in your name and that it is free of any defects or liens (except those approved by you). Contact your Escrow Officer if you do not receive this document within 90 days following your closing date.
   2. Retain your final closing statement in a secure place. You may need it for tax preparation purposes.
   3. You will receive the original recorded Warranty Deed by mail directly from the County Recorder. This may not come for several months, but it will come.
   4. If you obtained new financing, you should receive payment information from your Lender. Contact the lender if you do not receive any communication before your first payment is due.
   5. If your property is affected by a Homeowners Association, you should receive payment information from the management company in the weeks following the close of escrow. Call the management company if you do not receive notification from the association.

If you borrowed money when you purchased your home or if you have refinanced, it is likely that a Deed of Trust was recorded in favor of your lender. This document gives the lender a lien on your home until you sell your house or pay off the loan.

At the time of payoff, the lender is obligated to make certain that the title to your property is cleared of the lien. A Reconveyance of the Deed of Trust is the document which releases the lender’s interest in your property and confirms that you have fully paid your loan. This important document is your best protection against any defects in the title to your property and should be part of every escrow.