Escrow Legal Services Settlements And Closings

Cash offers are the strongest from a closing standpoint. Keep in mind, when reviewing offers, that financing is the most common reason transactions are delayed or unable to close.

If your Buyer is obtaining financing to pay for your home remember that according to NWMLS Purchase and Sale Agreements, you and your agent have the right to written updates, every five days, as to the status of the Buyer’s loan.
Be sure to get your escrow agent any documents or information they request as soon as possible. Escrow coordinates payoffs of mortgages and utilities before a property changes hands, and they will need to know the specifics of your accounts to do so.
Make sure that your real estate agent puts your current information on the sale contract, including full name, vesting (i.e. single, married, married as separate property), phone number, address, and email. It’s important that the information is complete and accurate.
Be sure to keep in touch with your real estate agent from the time of contract to closing. They have a fiduciary responsibility to you, if they aren’t communicating with you as often as you’d like, speak up!

For additional tips and information, please visit our links page. Or, feel free to contact us with any questions.

Communication is key. Escrow agents will only know what you keep them abreast of:

Provide us with a clear/readable copy of the Purchase and Sale Agreement.
Prepare your clients- let them know who their escrow company is, what they do, and that they will be in contact with them.
Make sure to put your client’s current information on the Purchase and Sale Agreement, including full names of all parties, vesting (i.e. single, married, married as separate property), phone number, address, and email.
For any additional negotiations, immediately inform escrow of changes to closing date, purchase price, loan amount, loan officer or lender changes, and rescissions.
If your client is operating under a trust, LLC, etc. have them prepared to give us a complete copy of the declaration documents. The same would go for situations involving death or divorce of parties- we will need copies of these documents. For sensitive issues such as these, clients often appreciate the care you will take to prepare them.
When you list a property, have your Seller gather all payoff-related information (account numbers or statement copies) for: HOA, utilities, mortgages, lines of credit.
If the property is a manufactured home, find out if title has been eliminated when you list it. You can do this, and prevent a variety of other issues, by opening preliminary title at the time you list a property.

For additional tips and information, please visit our links page. Or, feel free to contact us with any questions.

Furniture, fixtures and equipment (i.e. personal property not affixed to the real estate)
Leasehold improvements (for example, built in cabinetry and counters that are permanently attached to the building walls)
Good Will (which can include current business name, phone numbers, training, customer and supplier information, warranties regarding equipment
Non-Compete Covenant
Accounts Receivable (specifying an age limit and any applicable discount)

Once the parties decide what is being purchased and at what price, the buyer and seller must agree on an allocation of the total price among its component parts. This is a very important step with potentially significant tax ramifications for both sides to the transaction and is often forgotten during the initial negotiations. Because these allocations may have differing tax implications for the buyer and seller, it is always recommended that parties seek accounting and legal counsel. In all events, the parties must reach an accord on this matter since taxing authorities will be looking to make sure everyone is using the same basis.

Has the cost of the inventory been factored into the purchase price or will it be an add on when a value is determined? If inventory is included in the purchase price, the buyer must take care to ensure that an appropriate base line is established when the Purchase and Sale Agreement is signed to avoid undue depletion before closing. How and when will the physical counting of the goods take place? How will the goods be priced?

Is there a lease for the premises?

If so, will the buyer be taking an assignment of an existing lease or negotiating a new one? Will the seller also remain liable once the buyer takes assignment? These type of questions need to be addressed between the parties (and confirmed with landlord) at the commencement of negotiations so the parties can properly assess the value of the existing leasehold estate.

Will the buyer have the opportunity to review these items before signing the Purchase and Sale Agreement? If not, appropriate contingencies should be including in the contract for such review with termination options. Generally, seller should be expected to warrant at closing that the information provided was complete and accurate and there have been no material changes. Will the purchase be financed? If so, will seller be carrying back a note and taking a security interest in the assets? What will the terms of the note be? If buyer is obtaining third party financing, parameters for making loan application and obtaining a binding commitment should be addressed.

Typically, Seller should undertake to pay all debts and liabilities at or before closing and provide warranties to that effect. If items, like sales tax, are not handled at the time of closing, then an appropriate amount of funds should be held back in escrow until these obligations are paid.

These documents can include a bill of sale, lease assignments for the premises or equipment not owned by seller (confirmed by the landlord and equipment lessors), and assignment of trademarks, patents, copyrights, business names, web sites, and the like.

Such covenants need to define the geographic scope, time frame, definitions of what constitute competition and parties to whom the prohibition will apply.

Each party is expected to make certain warranties and representations which should be spelled out in the Purchase and Sale Agreement and survive the closing. Typical matters include seller’s transference of good and marketable title to the assets being sold free of any encumbrances; seller’s payment of all applicable taxes and other liabilities; seller’s; continuation of the business in a normal manner; the absence of any litigation on going or threatened, and the good working order of the equipment being acquired. Buyers may be asked to warrant information they have provided about their financial capability to purchase or the need to obtain licenses to operate the business.

Serving all of Washington State including Seattle, Everett, Tacoma, Bellevue, Bellingham, Spokane, Mt Vernon, Olympia and Bremerton.

Many times we can also assist with transactions in other states. Give us a call.

Please tell your Real Estate agent you would prefer to have Escrow Legal Services perform your closing or short sale negotiation.

Please remember that the information on this site is informational only and should not be construed as legal advice. Please feel free to contact the professionals at Escrow Legal Services for information appropriate for your situation.

Tips For Easier Escrow Closings