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The process of creating a purchase offer on a home or land isn't a difficult process but the buying/selling process does have a number of steps and a lot of "big words" that make it all seem somewhat daunting.  There are a number of steps involved that are generally awkward or inconvenient for most sellers and buyers to accomplish and that's where it's often beneficial to put the job into the hands of a Real Estate professional who can more readily complete the task. Following is the process of closing a sale as provided by North Meridian Title and Escrow: 

Step 1:

Purchase and Sale Agreement.

Upon entering into a completed Purchase and Sale Agreement or “earnest money agreement”, your Real Estate Agent deposits the earnest money check into either the Broker’s or Escrow Company’s trust account along with a completed copy of the purchase and sale agreement, which sets out the terms of sale of the subject property.

Step 2: Escrow.

Your Realtor will have opened escrow whereupon you’ll receive a letter of introduction in the mail indicating the Purchase and sale agreement has been received and buyer’s funds have been deposited into the escrow company’s trust account initiating the sale process.

The escrow closer is a neutral third party who holds and disburses the parties’ funds at the appropriate time, prepares certain documents to effect title transfer all in accordance with the terms of the purchase and sale agreement.

The escrow closer reviews the purchase and sale agreement and title commitment for necessary information to comply with the parties’ requirements for closing.

The escrow closer orders payoffs on underlying mortgages, contracts and or any other monetary liens encumbering the property. Part of the introductory letter sent to the parties might request information pertinent to the transacation i.e. loan payoff for the seller; lender approval criteria satisfying lender and subsequently seller requests for “ability to purchase”.

Step 3: Title Insurance.

Title insurance can be ordered by the Realtor, Lender, Buyer or Seller or the escrow closer, but is typically requested by your Realtor. The seller provides an owner’s title insurance policy to the buyer: buyer provides a lender’s title insurance policy to lender. The title insurance company researches the public records at the County Recorder’s Office, County Assessor and other governmental agencies to locate documents that may affect title to the subject property.

A search of the general index (county clerk) will disclose bankrupticies, divorces, name changes, judgments, probates, or other cases entered into the public records of the court.

A preliminary commitment for title insurance is then issued revealing all pertinent matters of public record affecting the subject property and involved parties. A copy of the commitment will be provided to the parties of the transaction.

It is the responsibility of the escrow closer to clar title of all unapproved encumbrances to title. You’ll often find your Realtor involved in resolving difficulties with these unresolved issues.

Step 4: Financing and Processing:

Arranged by the buyer.

The lender processes (underwrites) the loan to include review of buyer’s verification of funds to close, employment history, credit report, and appraisal of the property. Upon loan approval, lender’s closing department prepares the loan package (loan documents) with specific instructions to escrow.

The loan package is delivered to the escrow closer to prepare final statements, escrow instructions and transfer documents for closing.

Step 5: Signing.

After the escrow closer has reviewed the loan package, prepared the closing statements and transfer documents, appointments will be made with the buyer and seller to sign. Each party will have the opportunity to review the documents and ask questions of the escrow closer about information contain within them. Once each party is satisfied, the documents with be signed and the escrow closer will notarize each parties signatures to the documents. The buyer’s closing funds are deposited into escrow at this time, in the form of a wire transfer or cashier’s check drawn on a Washington State Bank. Due to Washington State’s Collected Funds Law, a cashier’s check must be deposited into escrow 24 hours prior to disbursement. Document signing and “closing” are two different events, which are often confused. Closing is a step that occurs after the documents are signed as detailed in Step 7.

Step 6: Lender Reiview.

When all documents are signed, the escrow closer returns the loan documents to the lender for final review. Lenders ask that 24-48 hours is allowed for this final process. The escrow closer also requests loan funds from the lender at this time, usually in the form of a wire transfer.

Step 7: Closing.

Upon approval by the Lender, the Deed and Deed Of Trust are delivered to the title company for recording at the office of the County Auditor. Verification of recording is given to the escrow closer who then “closes” the transaction.

1) Confirm receipt of lender’s funds into the escrow account.

2) Disburse all escrow funds in accordance with all parties’ instructions as follows:

Pay all underlying debts or encumbrances on property and bills submitted to escrow (pest inspections, septic pumping, chimney cleaning, roof repairs, etc.

B) Pay Real Estate Broker commissions.

C) Pay Seller the net proceeds of the sale.

3) Verbally notifies Seller, Buyer, and the Real Estate Agents that the transaction is CLOSED! At this point the buyer is entitled to possession of the property (unless otherwise agreed upon).

This is the general outline of how a transaction is completed from start to finish and of course there are circumstances that arise during these varying steps that affect the outcome and are the reason for putting a real estate professional into the equation. There are simply points in the transaction that are inconvenient for a seller or buyer to accomplish. They are more easily done by someone whose job it is to be available to complete them thus allowing the parties to the transaction peace of mind knowing their closing will occur smoothly. It allows the ultimate enjoyment of the Leavenworth Lifestyle.