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Real Estate Articles
Seven Things That Can Make an Escrow Go Bad:
Simon says:" Here is an advisory that I give to all of my clients. It outlines the most common things that can make an escrow a lot more stressful than it needs to be."
Closing Date
While everyone works hard to get an escrow to close on the specified closing date, this does not always happen. Important plans dependent on the Buyer's ownership or Seller's sale of the property should not be made until after the actual closing has occurred and the Buyer's name has been recorded at the Registry of Deeds.
Seller's Proceeds
Sellers should not make important time sensitive plans for the proceeds from a sale until after the closing has occurred. Sellers generally receive funds up to five business days after a closing.
Financing
When a Buyer chooses a mortgage professional they should take great care in making sure that this person is professionally sound and will perform as they say they will. If, for example, the loan does not fund in time for the escrow to close as scheduled, the Buyer will often be liable for the Seller's P.I.T.I., Principal, Interest, Taxes and Insurance for the number of days the escrow closes late. It is important that a Buyer is forthright with the loan professional regarding their financial situation. The more prepared your loan person is the easier it will be for them to present you with a financial product that suits your needs. When an escrow goes bad or doesn't close on time it is most often a result of a mishap on the financing side.
If your mortgage professional is not working out of Los Angeles or Santa Monica, then you need to make sure that they are aware of the idiosyncraices of this market. The best mortgage professionals tend to be the ones referred to you by your REALTOR. Your agent will have the most leverage over your mortgage professional. They also have a lot to lose if your deal doesn't go through properly. In California, Real Estate Agents cannot receive monetary gifts from mortgage people. If your agent is someone you really trust then they have everything to gain from you getting the best rates and service with your financing.
Deliveries
A Buyer should not make plans for movers or deliveries to the property they are buying until it has closed escrow. If the Buyer feels compelled to make arrangements prior to the actual closing then they do so at their own risk. Sellers are strongly advised not to let Buyers move any of their possessions into the property until after closing. The Brokers who are party to an escrow cannot be held responsible for the success of any deliveries to the property.
Contractors
A Buyer can sometimes schedule bids for work to be done prior to closing. However, it is strongly recommended that a Buyer does not schedule contractors until after escrow has closed. The Brokers who are party to this agreement can not be held liable for the timing of any construction work, scheduling or bids. If you need bids from contractors please let Simon know. He has workmen that are familiar with the construction laws in the Cities of Los Angeles and Santa Monica.
Fixtures
Seller's should be warned that all fixtures are included in the sales price unless excluded in writing. A fixture is any object that is bolted down or fastened to the property. This includes chandeliers and window coverings. Please refer to the CAR paperwork that accompanies this transaction to learn more about what constitutes a fixture and how these are dealt with. If you would like to exclude any fixtures from this agreement please let your Broker know immediately.
Pets
Make sure the property that you are buying allows any pets that you currently have or plan on getting in the future. Most condominiums in Santa Monica and Los Angeles have poundage limits of 20, 30 and 40 pounds. The number of pets is also often times restricted. Smaller buildings and small Townhouse complexs tend to have less restrictions on pets. The larger and more luxurious the building the more rules one tends to encounter.
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