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ESCROW & CLOSING COMMUNICATIONUpdate Realeflow with Escrow InformationDepending on what state you are closing in you may either use an escrow company, a title company, or an attorney to perform the closing. Regardless, you want to make sure you enter the contact information for all parties involved in the closing.Escrow Take Sheet (Completed and Sent to Escrow)An Escrow Take Sheet is one page form that you send to escrow that informs them of all the basic information Escrow will need to open Escrow. This form can come from Escrow or you can use the template form created on the Mastery website. The form essentially let's escrow know all the details about the deal and all the parties to the deal. It includes information about the property being sold like the property address, the price being sold for, loan information, seller and buyer and agent information. Commission Instructions (Sent to Escrow)You may included this information on the Escrow Take Sheet or you may send over a separate form or email outlining what agents are involved in the transaction and what % they are getting paid.Referral Commission Instructions & Authorization (Sent to Escrow)If there are any referral fees being paid out to other agents make sure Escrow has a Commission Instruction/Authorization form filled out for those agents. Deposit (Sent to Escrow)Make sure the deposit gets wired or sent to Escrow.Deposit Verified and Receipt of DepositVerify with Escrow that the Deposit has been received by Escrow. You generally want to do this within five business days. When escrow receives the deposit they will send back a Receipt of Deposit for your records. The money is held in Escrows trust account.Purchase & Sale Agreement (Sent to Escrow)Make sure the Purchase & Sale Agreement get's sent to Escrow. Preliminary Title Report (Have Escrow Order)Ask escrow to oder the mandatory Preliminary Title Report. The Preliminary Title Report is a report prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land together with the liens and encumbrances thereon which will not be covered under a subsequent title insurance policy. Make sure this is done quickly to make sure there are no delays.HOA / Condo Docs Information Request (Have Escrow Order)If applicable to the property ask escrow to complete the HOA Information Request to the HOA management office. Contact information for the HOA should be provided by the seller and given to Escrow. If it is a condo call the condo management company and make sure you get a copy and review the condo docs. Condo Resale Certificate - 6D (Have Escrow Order)If it is a condo have escrow contact the management company and make sure the seller has obtained a copy of the condo docs and a 6D certificate insuring that all condo fees and assessments have been paid through the date of closing.State & Local Disclosures Ordered, Reviewed, and SignedIn a lot of areas there are mandatory disclosures Escrow will send to buyers and sellers so make sure you know what those are and when they are sent and what needs to be signed. This will differ by area. Modify this checklist and add those local disclosures. Natural Hazard Zone Disclosure Report with CLUE (Order from Escrow)This is an example of the above as it is not applicable to all states or areas. Ask escrow to order the mandatory The Natural Hazard Zone Disclosure Report. This report provides parcel-specific disclosures of official hazard zones that may affect the future use of the property. The report also discloses any statutory natural hazard zones, property taxes and assessments, environmental contamination sites in the vicinity, and insurance claims history. The insurance claims history report is referred to as CLUE. The seller typically pays for the Natural Hazard Disclosure Report and the agent often orders the report on behalf of the seller when escrow is opened. Service providers for the NHZD report are Disclosure Source, First American Title, Property ID, etc. (NHZD)Natural Hazard Disclosure StatementThe seller and listing agent must sign the statutory form or a substantially equivalent form to be provided to the buyer if the property being sold is in a special flood hazard area, area of potential flooding, very high fire severity zone, earthquake fault zone, seismic hazard zone, or state responsibility area. If the transaction is a Foreclosure REO, Probate or Trust Sale the seller is exempt from signing the NHD statement. The Natural Hazard Disclosure Statement is often in the NHZD report. (NHD)Escrow Instructions and Amendments (Sign and send back to Escrow)Escrow instructions are written instructions by the seller and buyer of real estate given to a escrow company, a title company, or an attorney who will manage the "closing" of a real estate transaction. These instructions are generally prepared by the escrow holder and then approved and signed by the parties and their agents. Commission Instructions/Authorization (Sign and send back to Escrow)Once escrow instructions are created and received the listing agent will fill out the Commission Instructions/Authorization form, which will be signed by the broker and provided to Escrow. There are usually two separate Commission Instruction/Authorization forms to be filled out for the listing broker and the buyer’s broker. DISCLOSURES & REPORTSComplete "Contracts, Disclosures, & Reports Checklist"Make sure you review the "Contracts, Disclosures, & Reports" checklist and make sure that Escrow has everything they need and has sent everything that is Mandatory out to the buyer, seller, and agents. You will modify the checklist with items that may be specific to certain states or local plete "HOA/Condo Doc Checklist"If applicable, complete the "HOA/Condo Doc Checklist"FINANCING DOCUMENTS & COMMUNICATIONTraditional Financing Through a Mortgage BrokerCheck with mortgage broker or loan officer to get all paperwork, appraisals, fees, etc. done on time; get loan commitment and closing date commitment.Mortgage Docs/Deed of Trust for Private Money LendersLet escrow, title agent, or attorney know the terms, docs to be used if you are using a private moneylender.Have Private Money Lenders Wire Money to EscrowCall all private lenders for that project and have them send over money to the lawyer. Give them the wiring instructions as well as the address of the lawyer. Call mortgage company and get payoff, reinstatement (if delinquent), and short?sale package (if applicable) of underlying loans.Certificate of Good StandingSome hard money lenders/states will want you to show a Certificate of Good Standing that shows your corporation or LLC has met its statutory requirements and is authorized to do business in the state. INSURANCE, UTILITIES, TENANT COMMUNICATIONInsurance BinderCall insurance broker and get insurance binder for property so that insurance is in place the day of closing. Make sure lender’s name is on policy as additional insured.Lead Paint Violations / Builder ViolationsCall the city and see if there are any outstanding lead paint violations or building violations against the property. Electrical CompanyCall the electric company and get the bill changed over into company name set for the day of closing.Gas CompanyCall the gas company and get the bill changed over into company name set for the day of closing.Water CompanyCall the water company and get the water bill changed over into company name set for the day of closing.Sewer CompanyCall the sewer company and get the bill changed over into company name set for the day of closing.Oil CompanyMake sure there is enough oil to last 3 months if the property has an oil tank.Change of Management Letters Sent to TenantsSend out letters to all existing tenants that there will be a change of management on the date of closing. Home Warranty: Company: ___________ Confirmation #:_________or WaiverYou may want to consider offering a Home Warranty when you sell a property as it give the buyer piece of mind. 7 DAYS BEFORE CLOSINGSet Up Smoke/Carbon Monoxide Inspection (1 week before close)Some states require you have a smoke/carbon monoxide inspection before you close. Set Up Water Reading (2-3 days before close)Make arrangements to have the water paid on the HUD if possible. Otherwise, we need a receipt and a copy of our check. Get a copy emailed or faxed of the water reading that can be turned in at the close.Schedule Closing Date Verify and or schedule the closing date (if there is one individual who has limited power of attorney, see to it that they can attend the close). Trust Document PreparationIf applicable and if the property is going to be placed in a Trust make sure the documents are finalized.Detailed Scope of WorkIf applicable, have a detailed scope of work filled out prior to closing.Title InsuranceMake sure you verify that you have title insurance ready to go on the property. Get Copy of Insurance BinderCall insurance company and get a copy of the insurance binder faxed over so that you have it at munication LogIf you keep a communication log between you and all the parties you may want to print it an keep it in the property file. Final Walk ThroughCoordinate your final walk through 1 to 2 days before closing.Estimated HUD1 and Funds Needed for ClosingEscrow will usually send this a day before the closing and you need to verify everything on the Estimated HUD1. If you are funding part of the purchase the property with your own funds call and get amounts that will need to be brought to closing the day before the closing.DAY OF CLOSINGCompare Preliminary HUD against Final HUD Make sure negotiated figures are the same and that final HUD is acceptable to you and the bank if one is involved.Review All Closing DocsMake sure you have copies of all closing docs for your records. Deeds, mortgages, property insurance, title insurance, keys etc.AFTER CLOSINGClosing StatementEscrow will send you a closing statement 2 days after closing with any closing checks or extra funds. Transfer TitleIf you had to buy in your personal name for bank financing purposes make sure you transfer the property into your LLC or Corporation.Grant DeedMake sure the Grant deed gets recorded. Prepare Closing FolderGo through and make sure checklist is completely finished and prepare the closing folder and transfer it to the properties owned file.Post Closing Follow UpSend the seller or buyer a thank you letter and a testimonial request. ................
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