The Escrow Process
All escrow companies are different. But below is a general process that all escrow companies usually follow. You will find some discrepancies here and there, especially when it comes to the costs, as well as if there is questionable title. Some companies won’t insure property that has been recently purchased at a tax sale.
However, lets get to it....
Cost: each escrow company will charge both buyer and seller for their service. And those prices vary. If you are not sure which one to choose, ask your agent. She/he will have experience dealing with each one and can give you information to help you decide.
Time: Most dates in your Purchase Contract start the DAY of ACCEPTANCE-NOT the date that escrow starts to process it. You will find the date of acceptance is the date that the last seller signed.
Covid-19: REMEMBER- This has affected EVERYONE, including the escrow companies. They have employees still working from home, varied hours, appointments now mandatory, and that means a little bit slower service. To make it more challenging, sales during this pandemeic have skyrocketed and escrow companies have seen a huge surge in new escrows. Escrow will usually be "opened" anywhere from 1-5 business days after they have received the completed Purchase Contract. Please be patient. After all, this IS Hawaii and we do recognize and use the Aloha spirit here.
Earnest Money: Read your contract. Your earnest money is due to the escrow company via wire or hand delivered (or mailed) within the time stated on your contract. It is usually 3-7 business days. If you are not ready to make a serious purchase, please speak to your agent and hold off on the sale. The buyer is responsible for following the deadlines, and this is one of them. Each buyer and seller has deadline obligations to fulfill in a timely manner. Please pay attention to the dates.
Escrow Time Frames: Escrow service usually concludes within 30 days. On purchases involving a loan, it usually takes anywhere from 45-60 days. There are usually automatic 15 day extensions per contract just in case one or both parties need some extra time-those automatic time frames are different per case.
Inspection periods: On your contract pay special attention to J-1. That means, you shall have inspected the physical location and attributes of your property in that time frame AND have a house inspection completed if your purchase is a home/condo. We will usually ask you to sign a J-1 release stating you have inspected it, and are continuing with the sale. If you are buying a property site-unseen, you may send a representative to inspect on your behalf.
Opening Paperwork: Buyers and Sellers-Please pay close attention to these. Fill these out in a TIMELY MANNER. Everyone is this sale is on a time period. Escrow dates are set and all seller’s and buyer’s taxes, road maintenances, and other costs are PRO RATED. If we are not following the schedule, these prices have to be adjusted over again. Everyone is working hard, please follow dates and timelines.
Disclosures and M-1 Documents: You will receive these via your agent during the specified period per contract. Please sign and return if requested.
Final Walk thru: Usually within 5-7 days before escrow closes, you are asked to do a final inspection/walk thru of your property.
CLOSING DOCUMENTS/DEEDS: SELLERS-you will be asked to have a paper copy of your deed NOTARIZED and RETURNED. BUYERS-You will need to have all your remaining funds and balances (including escrow fees) PAID to escrow AT LEAST 2 BUSINESS DAYS BEFORE CLOSING. Please do NOT use personal checks, or cash. All remaining funds must be in form of a wire or postal money order or cashiers check. Again, all funds and final documents must be received no later than 2 business days prior to closing.
If all parties to the escrow follow the timelines, usually escrow wraps up right on time.
Happy escrow everyone.