Escrow refers to the process of concluding a real estate transaction by verifying all the necessary paperwork has been signed and completed as well as coordinating the transfer of funds. Agora Hawaii will supervise and organize the entire closing process. We will act as an impartial third party between sellers and buyers. Our team will handle the paperwork, help coordinate financing, and assist with legalities. Our job is to help bring buyers and sellers to an agreement while protecting all parties involved throughout the closing process. We make sure that all the documents are signed and filed correctly.

The escrow process begins one there is an accepted offer between both the buyer and seller:

  1. Home Inspections: Evaluating the condition of the property is a very important step before finalizing the sale. Recommended inspections include an examination of the structure, water piping (including drainage and plumbing), termites, electrical wiring and fixtures, air conditioning system, floors, windows, doors, roofs, and lanais. 

    If any defects are discovered, the buyer and seller can then negotiate any needed repairs and the buyer also has the option to cancel the purchase agreement. If the buyer and seller come to an agreement for any repair work or improvements, a timeline for repairs will be setup or in some instances, a credit will be offered to the buyer as compensation for the cost of the repairs.

    Buyers are always encouraged to purchase a home warranty protection plan to help offset some of the maintenance costs for unexpected repairs which could come up after purchasing the property. While inspections are a great tool to help identify possible problems or defects, age and wear does come into play and while an appliance or other item in the home may be working at the time of the inspection, there is always a possibility that it can break down and stop working after the sale of the home.

 

2.      Appraisal: An Appraisal is the process of determining the current market value of a property. This is prepared by an Appraiser who is an independent third party that is licensed by the State of Hawaii and has gone through specialized training.

Banks and lenders usually require an appraisal, but it is also recommended even when a buyer is paying cash to help verify that they property is valued correctly. After the appraisal has been completed, the lender will verify that the purchase price is consistent with the value of the property before making a final decision to offer funding.

Here are some of the things appraisers use to value a property:

Recently sold homes in the area

Units currently listed for sale

Overall condition of the property

Special features and Amenities

 

3.      Funding & Loan Docs: After an offer has been accepted, the lender will begin working to obtain all the necessary documents and information so that they can submit the paperwork to be approved by the underwriter. The purpose of an underwriter is to provide a check and balance to make sure that the borrower meets all the requirements to obtain a loan. During this process, they are looking at the income, work history and stability, assets, credit history, etc.

 

Once the appraisal is complete and all the necessary information has been received by the loan officer, they will submit the file for approval. This process can take several weeks to complete, so its important for the buyer to have all their information readily available for their loan officer. Once approved, the lender will prepare the loan documents and send them to the escrow company.

 

4.      Signing the Closing Documents: Once the escrow company has received the loan documents, they will perform an audit on the file to verify one last time that they have all the necessary documents and that the all the funding needed to complete the transaction is available. They buyer will be notified how much money is needed in order to complete the transaction and both buyer and seller will schedule an appointment to sign the closing documents. Usually the buyer or seller will meet with the escrow officer to complete the documents.

 

5.      Final Recording: Once all the paperwork has been signed by the buyer and seller and the funds have been transferred to the title company, the Title will be recorded in the buyers name usually within 2 – 3 business days.