Delays And Solutions When Beginning The Escrow Process

ISSUE: You need a copy of the escrow instructions to satisfy the existing lender or the landlord.

ISSUE: You will feel much better knowing that the buyer has actually signed the escrow instructions

ISSUE: You’re still waiting for the escrow instructions!

The following are reasons that may delay the escrow instruction process and solutions for each:

Escrow receives a fax of a fax of a faxed Purchase Agreement (“Agreement”) making it illegible.

ESCROW DELAY: must contact Broker/Agent and request a blank copy for clarity before preparing instructions.

AGENT SOLUTION: send a blank copy of the Agreement to escrow along with the signed Agreement.

Commission Agreement is not sent to escrow.

ESCROW DELAY: must contact the Broker/Agent and request a copy in order to prepare Commission Instructions which are included with the seller’s escrow instructions.

AGENT SOLUTION: send the Commission Agreement to escrow along with the Agreement.

Buyer and/or Seller did not date the Agreement when it was signed.

ESCROW DELAY: must contact the Broker/Agent to get the date so any contingency dates can be determined and included in the escrow instructions.

AGENT SOLUTION: make sure your client signs and dates the Agreement.

Seller is shown as an individual on the Agreement, but they are actually an entity (ie: corporation, limited liability company, partnership, etc.).

ESCROW DELAY: must contact the Broker/Agent to request an Addendum to the Agreement then wait for signed Addendum before preparing the Escrow Instructions.

AGENT SOLUTION: confirm ownership by checking the business license, seller’s permit, lease agreement, etc. –or- use Central Escrow’s Bulk Sale Information Form.

Seller is shown as an entity, the Agreement is signed, but the signer’s name and title are not shown.

ESCROW DELAY: must contact Broker/Agent to inquire as to the signer’s name and title.

AGENT SOLUTION: write or type the name and title below the signature –or- use Central Escrow’s Bulk Sale Information Form.

Buyer and/or seller are shown using a nickname (ie: Bob for Robert, Bill for William, Peggy for Margaret, Betty for Elizabeth, etc.).

ESCROW DELAY: must contact Broker/Agent to inquire as to the legal name of party.

AGENT SOLUTION: since all documents should be in a person’s legal name, ask to see their driver’s license(s) and use that name on the Agreement.

No business zip code is shown on the Agreement.

ESCROW DELAY: must stop processing and go online with the U.S.P.S.

AGENT SOLUTION: ask seller for the complete address, check the lease agreement -or- use Central Escrow’s Bulk Sale Information Form.

Has Seller had any other businessess within the past three years?

ESCROW DELAY: must contact Broker/Agent as this information is required on the Notice to Creditors of Bulk Sale prior to publishing/recording.

AGENT SOLUTION: use Central Escrow’s Bulk Sale Information Form.

How do the parties wish to receive the escrow instructions?

ESCROW DELAY: must contact Broker/Agent and inquire as to whether the parties want them sent via email, messenger, overnight delivery, U.S. Mail, or if they would like to go to the Escrow Holder’s office to sign.

AGENT SOLUTION: include such information in your letter or email to the Escrow Holder –or- use Central Escrow’s Bulk Sale Information Forms.

A delay is inevitable whenever there is incomplete information and the Escrow Holder must stop processing to contact the Broker(s) or Agent(s). They, in turn, might have to contact the parties to obtain some of the information. A one day delay could mean a one week delay when it comes to publishing! The Escrow Holder truly wants to get the opening escrow packages out to all parties as soon as possible. Our receipt of the completed packages means we can publish the Notice to Creditors -  which establishes the Sale Date -  which gives us a closing date -  which means pay day!

About The Author:  Darleen Sweet is with Central Escrow, Inc. (Orange County office) a financially independent, full service escrow company in Southern California. Darleen has been an escrow professional for 28 years, specializing in Bulk Sale, Liquor License Transfer, Hospitality and Commercial transactions for the past 16 years. Darleen can be reached direct at 949-733-0022 X103.

Posted on June 22, 2011  |   Email This Blog Post   |   Print This Blog Post   |  All Contributions From Darleen Sweet