YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
QUESTION:
Is an escrow limited to who and what they can pay from the Seller’s net proceeds at closing?
ANSWER:
A very good question! We actually get that question a lot so I want to preface it by saying that in California, for a Licensed Escrow company, we follow the Escrow Law very strictly. Our regulator, the Department of Financial Protection and Innovation also has certain guidelines that the auditors look at. Here are the general guidelines:
Payments can be made for items that have direct correlation to the sale of the property. For instance – termite corrective work, repair invoices to handymen or contractors, reimbursement for staging fees paid upfront by real estate brokers.
Payments can be made for loans or liens that show affecting the property. For instance – a private loan, an IRS lien, a judgement.
Not allowed – anything that is not traced to the sale of the property. For instance, arbitrary requests to pay credit cards or personal bills or that brother-in-law that you owe money to.
Proceeds are paid to the name of the person or entity that shows as the Seller. For instance, we do not pay to John Doe, an individual, if the Seller is Doe Limited Liability Company.
For specific questions or issues, please call your Escrow Officer in advance to discuss.
Important! These payments require the Seller to approve in writing – whether by amendment or on the actual bill.
EDUCATIONAL MOMENT:
Manage expectations!
If you need certain items to be paid, find out first, at the opening of escrow, if it can be done. What are they and how do they relate to the transaction? If you are the Seller’s agent, DO NOT arbitrarily say, “Oh, sure, I know your escrow will pay that.” When the Escrow Officer declines to pay, then your Seller may not be too happy.
There are real estate agents who will advance funds to do Sellers’ repair work. Be sure the list of advanced funds is given to escrow so that an amendment can be signed by Seller early in the transaction before any Lender required Closing Disclosure is drawn.
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~ Video of the Month ~
Can you live in a dumpster?
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~ Quote of the Month ~
~This “Spring Forward” thing would be a lot more popular if we moved the clocks ahead at 2PM on Monday. ~
Unfortunately, 2025 Spring Forward is on Sunday (March 9th)!
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My YouTube Offering for the Month
Knowing how to answer this question when you open escrow:
“How are you going to take title and what is your vesting?”
(Disclosure – The answer is complicated so this video is approx. 15 minutes)
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You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com