During escrow, an escrow agent will oversee the real estate transaction and ensure all terms of the sale are met before any documents or money changes hands. Your real estate transaction isn’t complete until escrow closes, at which point the final paperwork is completed, funds are exchanged, and the deed is recorded. For buyers, the escrow process means a lot of waiting and little action. Still, it’s important to understand this process must be completed before you can close on a house for sale in Irvine. Making mistakes during escrow can delay closing and even affect the sale.
Leaving Town or Becoming Hard to Reach
Buyers and sellers must both be easy to reach during the escrow process in case a problem comes up or some type of action is necessary. Your Irvine real estate agent, lender, or escrow officer may try to contact you during escrow for any number of reasons. If you can’t be reached, your closing date will be pushed back. If you need to travel, make sure you give all necessary people a way to contact you.
Acquiring New Debt
As a buyer, you must remember you have not yet closed on your home. Your lender will run your credit again before closing to make sure nothing major has changed. If you accrue more debt, such as buying a new car or appliances, it will affect your debt-to-income ratio, which could be serious enough that it ruins your ability to secure the mortgage. Don’t try to get around this by paying cash, either. Your lender will also check your cash reserves with a recent bank statement before closing to make sure you have at least as much liquid assets as you did when your mortgage was first approved.
To get approved for a mortgage, you typically need consistent job history in the same occupation and preferably with the same employer for at least two years. Switching jobs during escrow might make your lender nervous and question whether you will be able to afford the mortgage with your new job. If you want to change jobs, wait until your loan closes.
Making Unusual Deposits
Before closing, your lender will request an updated bank statement to check for major changes and to make sure you still have adequate cash reserves. Don’t make any undocumented and unusual deposits in your checking or savings during escrow. You should also avoid moving large amounts of money between accounts because it could raise a red flag and make your lender suspect you have taken out a new loan.
Ignoring Your Responsibilities as a Seller
As a seller, you need to make sure your home is available for inspections, and you will also need to meet contingencies of the contract within the promised time frame. If you agreed to make certain repairs, they must be done before escrow can close. Don’t delay doing these repairs or leave town for an extended time. If you need to travel, have someone local available to oversee repairs on your behalf.
Whether you’re in escrow for a home in Stonegate, Quail Hill, or Northwood, Irvine real estate agents recommend you avoid making the above mistakes at all costs. If you’d like to learn more about buying property in Irvine, CA, get in touch with the reliable agents at OC Residential. Call 714-454-6304 today.