Escrow Tip: Transaction Dates and Terms

When it comes to dates and terms of an escrow transaction, it is common to misunderstand the terms used when discussing the steps in an escrow. The escrow closing occurs between the time a seller accepts the purchase agreement and the buyer gets the keys to the new home. Such terms as the date of signing, funding, closing of escrow, recording, and disbursement are often used throughout the process of an escrow transaction. Below are the terms and their intended meanings.

Signing is the date all parties sign all of the documents. Generally, the Sellers and Buyers sign at different times, so more than one signing date may apply.

Funding is the date the lender sends loan proceeds to escrow or when the Buyers deliver good funds if they are paying cash for the transaction.

Closing of escrow (often abbreviated as COE) is the date agreed to in the written contract between the Seller and Buyer or any extension or amendments made thereafter.

Recording is the date a transaction is recorded with the county to transfer the real property from the Sellers to the Buyers. The deed is recorded along with any deed of trust or lien placed on the property, for the benefit of the lender which has loaned money to the Buyer for the purchase of the property.

Disbursement of funds occurs once all necessary documents have been recorded.

Many times several of the dates occur in quick succession of each other. If the Buyers are being financed by a lender, escrow will receive the loan documents, arrange for the parties to come in and sign all closing and loan documents, submit the signed documents to the lender for approval, receive the funds, obtain funding approval from the lender to record, and disburse the funds to the Seller and any other parties to be paid. The ultimate goal is for the closing to occur within the time period set and agreed to by the contract entered into by the Buyer and Seller. Contact your Escrow Officer at Title Security Agency for assistance in determining the process for your particular transaction. You can find a list and their contact information by clicking the following link: Escrow Directory