In California, escrow refers to the time between:
1. Acceptance of the purchase agreement, and 2. Recording of the deed transferring legal title from seller to buyer
WHEN IS THE MONEY RELEASED?
The earnest money deposit remains in escrow until the transaction either: • Closes, at which point it is applied toward the purchase, or • Legally cancels, in which case the funds are disbursed according to the contract and mutual instructions Only after all conditions are met and the deed is recorded are the funds - EMD and down payment - released to the seller.
Step #11: Be Prepared
It’s not over till it’s over. Your new home isn’t technically yours until the closing process is fully complete. Sometimes the deal can suddenly fall apart at the last minute, and you should be prepared for this possibility. For example: • Poor home inspection: If major damage is revealed during the inspection, the deal could be called off. • Low home appraisal: This can complicate—or even jeopardize—a transaction. If the appraisal comes in below the agreed-upon purchase price, the lender may not approve the originally requested loan amount because the loan-to-value ratio is based on the appraised value. As a result, the buyer may need to renegotiate the price, challenge the appraisal, adjust loan terms, or increase their down payment to make up the difference created by
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