APR in the News Buyer / Seller Information

How long does an escrow period last and what can complicate it?

July 14, 2014
Agents Sound Off
 

Karen Richardson
Orinda
925.639.3904
krichardson@apr.com

Question: How long does an escrow period last and what can complicate it?
Answer: A “typical” escrow is 30 days. That gives the title company plenty of time to pull up the title report, and search for any liens, easements, lawsuits, or any other clouds on title. When the title company closes escrow and you are granted title they are insuring that you know everything that may be attached.
There are three other things that determine how quickly or slowly escrow closes, and these are on the buyer’s side. The loan contingency automatically makes the contract default to 17 days for the loan to go through underwriting and have complete approval.
The second factor is the appraisal contingency which is when the bank orders an appraisal of the property. If there is a difference between the appraisal amount and the purchase price, the buyer is required to pay the difference in cash.
Finally, there is the physical contingency which the buyer can make any amount of time they choose, but again defaults to 17 days. Often reports have been done on the property in advance. If not, buyers may need time extensions to complete, review, and sign off on any inspection findings. Agents will file time extensions at this time, which can make the escrow period as long as it takes for the buyer to feel they know and accept all they need to about the property.
At that point, the buyer can sign off this contingency, or ask for a price reduction, or request that repairs be made. So, while a “typical” escrow is 30 days, they can go from 1 week to many weeks, depending on these factors.
Read more opinions on SFGate.
SF_Gate_logo2

No Comments

    Leave a Reply