After the buyer and seller can come to an agreement and we have an offer signed by both sides, we can “start escrow”
Starting Escrow Step 1: Submit contract to our escrow company
Usually the first thing we do is submit the offer documents to our agreed upon escrow/title company.
An escrow company is the middle man in our transaction. Their job is to essentially make sure things are done according to the contract. They hold the deposits and help coordinate between the seller, buyer, lenders, and Clark County. They make sure the title/ownership goes into the buyer’s name at the end of this process. They make sure the seller is paid. They make sure the lender or bank sends the money in.
They’re basically our non-biased best friends during this purchase process.
Starting Escrow Step 2: Submitting Earnest Money Deposit
After submitting our offer documents to escrow, we usually write a check, money order, or cashier’s check for the earnest money deposit. The earnest money deposit is usually between $1500-$5000 for most home purchases. Cash deals may require higher deposits.
The earnest money deposit will go towards your down payment and closing costs. In the case that we cancel escrow for a qualified reason, we will get our earnest money deposit back in full. It’s pretty rare to lose your earnest money deposit.
To lose your deposit, the case has to be that everything about the home’s condition was great after inspections and you didn’t disclose that you had any issues at all for the first 15 days, you were approved for the loan, and near the end of the long escrow you changed your mind without a good reason that involves the house’s condition. That wastes everyone’s time and you would usually forfeit the deposit to the seller in that case.
Most people are more reasonable and don’t lose their deposit like that. I’ll go over the different ways we get our earnest money deposit back easily in the next steps.
Starting Escrow Step 3: Preliminary Title Report
An escrow company in Las Vegas is usually also a title company. A title company usually checks that the seller actually owns that home and who they owe, if anyone.
They check to see if the seller has any mortgages or unpaid fees to contractors, etc. They normally provide the buyer’s agent with a “preliminary title report” with this information as soon as possible. If the seller owes anybody money with connection to this home, the debts will be cleared before the title or ownership goes into your name. That’s the title company’s job.
For example, if the seller owes $3000 in Homeowner Association Fees or $1500 for a roofing contractor who hasn’t been paid yet, the escrow company will make sure those debts is paid off before you take ownership.
I hope after reading this, you understand what’s going on when we “start escrow.”
Ready for the next step? Click here: Step 6: Due Diligence and Inspections
Need to go back a step? Click here: Step 4: Making Offers
Want to start from the beginning? Click Here: Step 1: Setting Up Your Wallet
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Leng Lim
Las Vegas Real Estate Specialists
702-343-2670