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Phone: 979-693-0201 Email: [email protected]

Myke Leatham | Brazos County Realty

Myke Leatham | Brazos County Realty

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The Escrow Process Explained

June 30, 2020 by Myke Leatham

There’s nothing better than being prepared ahead of time for a new experience. While it’s fun to be spontaneous and make spur of the moment decisions, certain situations require a bit of research and information in order to be informed so you can make educated decisions. Buying and selling a house is one of those life moments where it’s important to be informed and receive guidance from a professional, experienced real estate agent. The process of buying or selling a home can be very easy, or it can be very complicated depending on the unique situation of both parties involved. One of the main stages of purchasing a home is the escrow process, which begins as soon as an offer is accepted and ends when the keys are transferred and title is signed over to the new owners. There are numerous steps involved throughout the escrow process, some are optional while others are mandatory, but in this blog post we’re going to comb over the escrow process in detail and explain every aspect of it as it relates to buyers and sellers. 

The escrow process is facilitated by an escrow agent – this is a neutral party that holds onto the buyer’s funds and ensures that the terms and conditions of the purchase contract are met by both the buyer and seller. Once escrow verifies that all parties have completed their obligations as stated in the signed purchase agreement, then the buyer’s funds will transfer to the seller and ownership will be transferred to the buyer. 

Escrow companies are licensed and regulated by the state, which provides oversight into how the company is managed and that they fulfill their duty as a third party to any real estate transaction. Because large sums of money flow through escrow companies on a daily basis, there are strong security measures in place to protect buyers and sellers and to keep the funds safe from hackers and scammers. The reliability and performance of an escrow company are absolutely vital to protecting the interests of all parties are involved in a real estate transaction. 

The Escrow Process Explained

Step 1 – Open Escrow

The first step in the process is to select a property that you like, submit an offer, go back and forth on negotiations and have a signed purchase agreement on the home between both the buyer and the seller. Once both parties have signed the contract and the real estate agent delivers it to an escrow agent the escrow process can begin. The buyer must submit a deposit, also known as earnest money, to the escrow company who holds on to the money until the close of escrow. The seller will then produce a list of property disclosures with their agent, which will be reviewed by the buyer who can either accept or reject them. Seller disclosures will often include information about the property including any flaws or issues with the home, information about previous improvements and repairs, as well as any potential environmental hazards. Sellers are given a disclosure packet to fill out before they even list a property for sale so they can be prepared – defects and issues with the home must be disclosed to a buyer before their offer is accepted. 

After the buyer reviews all disclosures they can choose to complete a home inspection by a professional and experienced home inspector, which will be shown in the contract as the inspection contingency. The buyer will have a specific amount of time allotted to complete the inspection, which will include a thorough inspection of the roof, sewer system, chimney, pool, pest inspection and general overview of the entire home. Buyers also have the option to obtain additional inspections by professionals for a pool or other special area of the home. Once the inspection is complete, the buyer can renegotiate certain terms of the purchase agreement, including asking for a reduction in price to cover any necessary repairs that came up during the inspection. The seller has the opportunity to respond to these requests by either agreeing to them, submitting a counteroffer with a different solution or to decline the changes. If the buyer and seller cannot come to an agreement on this renegotiation then the transaction will fall out of escrow and the earnest money deposit will be returned to the buyer. 

Step 2: The Mortgage Escrow Process

If the buyer is borrowing funds for the purchase of the property, the escrow process takes longer and can sometimes become complicated. The buyer will submit a loan application directly to their lender or through a licensed mortgage originator. Most buyers will have a pre-approval letter from their lender showing how much they are qualified to borrow and at what price they can afford to buy a home. In order to obtain a pre-approval buyer must prepare a comprehensive list of personal financial documents, including:

  • Several monthly bank statements
  • Federal tax returns for the last two years
  • Verification of employment
  • Explanations about any credit inquiries 
  • Information about divorce settlements, owed child support, bankruptcies, liens and anything that could potentially affect their ability to pay their mortgage

Once all this information is submitted then the lender can either approve or reject the application for a home mortgage loan. If the buyer is approved then they will receive a loan commitment letter, which shows that the lender will fund the mortgage and requires a property appraisal to confirm the current market value. If the home appraises for less than the purchase price, the buyer will have to put down a bigger down payment and renegotiate their loan terms. The purchase agreement will outline specific dates by which the buyer must meet their loan contingency and appraisal contingency. The final portion in this mortgage escrow process is for the buyer to secure homeowner’s insurance that needs to be submitted to the lender. 

This step of the escrow process is lengthy and there are many details and steps to follow. Our team can easily navigate this process, walk you through all the terms and conditions and ensure that you meet every deadline in a timely and stress-free manner. The most important thing to keep in mind during the escrow process is to avoid major financial commitments or life changes, including switching jobs, opening new credit card accounts or buying big ticket items like a new TV or a car – this could put your loan approval in jeopardy and can derail the entire purchase transaction. 

Step 3: Closing Escrow

The buyer has the right to complete a final walk through of the house before escrow is scheduled to close. This allows the buyer to make sure that any agreed upon repairs were completed and that the home is in the same condition as it was at the beginning of escrow. Once the walk through is done the buyer will have to sign all of their loan documents and complete any necessary paperwork that is remaining prior to the loan funding. A title search will also be done to determine that the seller is the owner of the home and that there are no liens that are tied to the home – if the title search is clean then the closing process will continue. At this point in the process there is a lot of paperwork involved for both the buyer and the seller – once all of the paperwork is completed and signed the buyer will pay any remaining closing costs and the title deed will be recorded with the appropriate government agency and transfer title, or ownership, to the buyer. At this point in the process escrow will pay out all parties involved in the transaction including the seller, real estate broke and/or attorney and anyone else who participated in the sale. The keys to the home will be delivered to the buyer who can then proudly take possession of their new home!

If the seller needs to stay in the property beyond the close of escrow, then there must be a signed agreement with the buyer granting them permission to stay at the home with details showing how long they can stay, how much per diem rent will be paid, etc. 

The escrow process is undoubtedly the most daunting part of a real estate transaction, for both a buyer and a seller. There are many moving parts, many things that need to be done in a timely manner and often at the same time, and there are many things that can go wrong. This is why it’s important to take the time to interview real estate agents and work with someone who is professional, experienced and who you feel comfortable with. For more information about the escrow process, or if you are interested in buying or selling real estate in Bryan College Station, please contact us. We would love to show you around, explore current listings, guide you through your real estate transaction from start to finish and assist you in making your real estate dreams come true – whether you are buying or selling a home.  

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Category: Blog

About Myke Leatham

I’m so glad you found me – your College Station and Bryan, TX real estate source! When you choose to buy or sell a home in College Station/Bryan, TX or other surrounding areas using our expert services, you will receive a free consultation to determine your needs, free listings, and free reports sent to you by email. These weekly reports will show you how hard the members of my team are working to accomplish your property goals, and we guarantee the best service and consultation you have ever experienced. You’ll find the best community information for the College Station, Texas region right here.

It’s nice to know YOUR Realtor will still be of service after the sale.

Experience Counts: Broker/Owner of Brazos County Realty
Over 25 years of sales experience. With past ABR, GRI, CRS, & Epro designations.
Continuing education in real estate: Education is paramount in an ever changing industry like Real Estate. Myke has taken over 1000 hours of real estate specific courses which include but are not limited to: Residential Appraisal, Marketing, Law Contracts I & II, Finance, Residential Inspections, Principles and Practice, Law of Agency, Code of Ethics, Bankruptcy/Easements/Surveys/and Probate, Home Warranties, 1031 Exchanges and hundreds of hours of extensive real estate training.

Reputation: SALES LEADER since 1998; Top Producer 2000 through 2009. Listed among the top agents in the county. Consistently ranked among top realtors for total sales volume out of 900 realtors for commercial and residential real estate in the Bryan/College Station, TX area. When Myke represents buyers, she presents all viable options to her clients, including those properties that are not officially listed, but could be available for sale based on her inside information. Her expertise lies with investors and marketing homes of all price ranges in College Station/Bryan to local, national and global buyers, across all major media channels and through her extensive, personal network of contacts.

Myke is among the top 1% of all Realtors in North America!
She has earned the Designations of ABR (Accredited Buyers Representative), CRS(Certified Residential Specialist), GRI (Graduate of Realtors Institute)CHMS (Certified Home Marketing Specialist), and E-pro (Certified Internet Professional)
Fewer than 3% of all Realtors nationwide earn these certifications. They are not only a symbol of Myke’s commitment to this business, but these designations are your assurance of a skilled, trained real estate professional.

Myke is a consummate real estate professional who not only understands the art of deal-making, but also the art of relationships. She makes the process of buying and selling homes an uplifting and fun experience. She has a tremendous appreciation for Bryan and College Station, its rich history, and Texas A&M traditions having lived in the area for 25 years. Her knowledge of Bryan/College Station’s real estate market and market trends is unparalleled. Having been personally involved with clients through their remodeling, purchasing and selling processes, she knows intrinsic quality and value when she sees it. When she doesn’t see it she lets her clients know, without hesitation.
Myke’s proven track record and affiliations in the field of real estate demonstrates her high level of professionalism.

* High energy and enthusiasm
* Aggressive marketing
* Expert negotiating skills
* Ability to listen and ascertain customer’s desires and needs
* Fun to be with
* Internet savvy
* Because Myke is an experienced investor, she quickly helps her customers locate and define good business opportunities. No one likes the feeling of being ‘sold to’ so Myke provides as much information as possible to help you make the right decision.

Personal Commitment:
I am prepared to go the ‘Extra Mile’ for you, because I understand the financial and emotional significance of purchasing and selling your home. I will carefully listen to your desires and arrive at a workable plan. I believe sensitivity, listening, and service are important keys to success.
Whether you are buying or selling a home or you are just curious about your home’s market value, I’d be happy to provide my market expertise and intelectual property without obligation, or meet with you to evaluate your home for future reference. I want my customers to have a great time and enjoy the total process of purchasing or selling property. It gives me great pride when my customerspass my name on to their friends and family. I will continue to work hard to make sure critical information is available at www.AggieRealEstate.com and I invite all interested investors to search my site for cash flow opportunities. I will dedicate my time and talents to helping you achieve your goals. It is my goal to make your buying and selling experience extraordinary. Look closely and you’ll see how much I love meeting and working with people. You’ll experience the difference in working with an experienced and dedicated professional.

Personal information:
Michelle goes by ‘Myke’ and is the proud mother of 6 children – 3 girls and 3 boys. Her husband is David Leatham. They met at Brigham Young University. They have been married since 1977. David is a finance professor, and Associate Head over graduate studies in the Agricultural Economics Department at Texas A&M University, and speaks fluent Spanish. They have lived in College Station since 1983 and loved every minute of it. Myke loves to quilt, sing, swim, ‘sing’, bake bread, ‘sing,’ garden, ‘sing’, sell real estate, and ‘sing some more’ :-). Family, church, and real estate consume most of her time. Truth, honor, integrity, kindness, loyalty, gratitude, and service are very important words to her.

Slogan: ‘Let Myke Help You With Your HOMEwork!’

Referrals: The highest compliment I can get is when you pass my name on to others or post a kind remark on the internet. When you send your friends and family my way, I’ll always provide them with the highest quality of service that I know you would appreciate. Thanks in advance for all your support and friendship.

Previous Post:The Benefits of Purchasing a Home Warranty for College Station Homes
Next Post:The Pros & Cons of an Open House

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