Escrow Procedures

I. LISTING CHECKLIST

When taking a listing, advise your clients the following items will be required when you open escrow:

1. A copy of all current lender statements showing principal balance and loan
   number
2. A copy of all HOA statements showing the name of the association and dues amount
3. Written authorization allowing escrow to order the HOA documents (if seller
   does not provide) and Demands (escrow will need seller social security numbers to order demands)
4. HOA documents required to be provided to the Buyer:
   
   1. Current financial statements, budget
   2. 12 Months Minutes
   3. Articles of Incorporation
   4. By Laws
   5. Rules and Regulations
   6. Copy of Liability Insurance Coverage
   7. Litigation Information
   8. Any Special Assessment Information

NOTE: The homeowner may have this information when they purchased the property but it needs to be up to date for the buyers. Whenever possible, encourage your sellers to allow escrow to order the HOA package as it saves time and insures all parties that the most up to date information is being provided to the client. It also insures that the new buyers will receive all documentation during the contingency period Also, some Homeowners Associations will not allow sellers to pass on their information.

II. OPENING ESCROW

In order to open escrow, the following items are needed:

1. Legible, fully executed copy of the purchase contract with all counters and addendums. (if fully executed copy is not legible-also fax the clear unsigned copy)
2. Copy of deposit check and status of original deposit check
3. Contact numbers for the seller and buyer's agent
4. Commission information
5. HOA information (1 or 2 assns, HOA name, management company, dues amount)
6. Title Company and sales rep.

A draft of the escrow instructions will be sent to both agents for approval. At that time, arrangements are made to pick up the deposit check and the preliminary title report is ordered.

III. PROCESSING ESCROW

1. Escrow instructions are sent out to all parties per the instructions of the agents. Certified copies ofthe instructions are also forwarded to the loan broker or
   lender.
   
2. Escrow will contact the sellers to make an appointment to come to the escrow office or schedule a traveling Notary to notarize the Grant Deed and Trust Certification, if required. At that time the Notary will also pick up the escrow instructions, HOA documents, authorization to order Demands, etc. Note: Notary Services (Grant Deed, Trust Certifications) are provided free of charge to our sellers in the Orange County Area.
   
3. Once escrow has the information and written authorization from the seller, we will order the Demands and upon clearance of Buyer's funds, order the HOA documents

IV. DISTRIBUTION OF DOCUMENTS:

1. Preliminary Title Report will be sent to Listing Agent, Selling Agent and Buyer
   (Title sends Preliminary Title Report to the Loan Broker or Lender direct) Note: Escrow will notify the seller and listing agent if any items appear which need the seller's attention such as delinquent taxes, liens or judgments
   
2. Covenants, Conditions and Restrictions (Sent to Buyer -Title sends to the loan broker or lender direct)
   
3. Termite Report and Completion (Listing Agent, Selling Agent, Buyer and lender with signed loan documents if it is a lender requirement)
4. HOA documentation to Buyer and lender ifrequested. (HOA certification is not ordered unless the lender requests it. Each lender has their own Certification Form and it is the Loan Broker or Lender's responsibility to request it.) Note: Escrow cannot order HOA documents until the Buyer's funds on deposit clear. Most HOA Management Companies require money up front.
   
5. Any bills to be paid through escrow or reimbursed to agent through escrow should be submitted as soon as possible. Escrow forwards copies of all bills to be paid through escrow to the Sellers for approval.

V. LOAN DOCUMENTS/FUNDING/RECORDING:

1. The Lender usually notifies Escrow when they are ready to draw loan
   documents. The Lender either emails the documents or calls for a pick up. Upon receipt ofthe documents, Escrow will contact the Buyers to set up an appointment to sign. Ideally, loan documents should be signed 1 week before the close of escrow, but because of the high volume of business, the lenders usually send out the documents only a few days before the close date.
   
2. Loan documents have to be packaged and back to the Lender for review before funding. If the lender is local, documents are set by courier. If the Lender is out of the area, the loan documents are sent via overnight mail.
   The Lender usually needs 2 working days to review the loan documents; however, if it is slow time of the month, the funder may review the file in a shorter period of time.
   
3. Each Lender has a different funding procedure. As soon as the loan
   documents are packaged and returned to the Lender, Escrow is assigned a funder. The funder contacts Escrow and advises conditions and funding time frames.
   
4. The lender will fax Escrow the funding figures the day of closing. Escrow balances the figures, reviews all title requirements and sets up the recording with Title. Title will record as soon as they verify funds are deposited in their account. NOTE: If funds do not arrive in time, title cannot record until the next business day .
   
5. Title contacts Escrow when recording is confmned. Escrow contacts the Listing and Selling agent of confirmation of recording.
   

VI. DISBURSEMENT OF FUNDS:

1. The title company faxes all title charges! payoffs and wires the balance of funds to Escrow. Escrow balances the file and disburses the funds. NOTE: Escrow cannot release funds until the wire is received from title which usually occurs before 2:00 PM the day after closing.
   
2. If the Seller has requested a wire. funds are wired to the Seller. NOTE: The Seller can receive proceeds in the form of a check the afternoon after the day of closing. The wire usually arrives in the Sellers account the morning ofthe 2nd day after closing.
   
3. Listing and Selling Agent packages and checks are delivered to their offices
   
4. Buyer's refund check is mailed to the new home unless otherwise specified.
   
5. All other funds are disbursed
   
6. File is closed.