Step 5 - Opening Escrow
The "escrow period" is the time between which the contract is "executed" and the time that the property is officially transfered to the new owner or the "close of escrow date." Once a contract (and any subsequent counters) are signed by both parties the contract is then considered "executed" and escrow is then considered to be "opened". It is at this time that the initial deposit from the buyer (earnest deposit), which is collected at the time the buyer signs the offer, is deposited with the Title Company, also knows as the Escrow Company. The escrow officer, as they are called, will then issue a receipt and open up the file to start facilitating the transfer of the property.
In a standard transaction, where homeowner is the seller of the property, the buyer will usually have the ability to choose the title company. There is a section in the purchase contract where the buyer will name the title company when writing the offer. This is negotiable, however, and sometimes the seller will name a different title company within a counter offer. In bank owned transaction the bank pretty much ALWAYS names their title company of choice in a counter offer.
The title company acts as the neutral third party throughout the escorow period and handles the exchange of money between the buyer and seller. They are responsible for researching the title on the property and making sure it is free and clear of any leans and other hindrances. Once the title is found to be clean the title comany that will issue the title insurance on the property. If the property is governed by a Home Owners Association then the they will also handle the transfer with the HOA management company from seller to buyer.
We work with a great team of escrow officers who are very friendly and helpful and always willing to answer any questions you may have at any point during the purchasing process. There are several ways in which a buyer or buyers can hold title in the state of Arizona. Here is a brief explanation of each. If you have any further questions please feel free Contact Us or fill out the Buyer Form by going here.
Ways that you can Hold Title:
Sole Ownership
- A single individual who has not been legally married. An unmarried individual who was married and is now legally divorced.
- A married individual who wishes to acquire title in his or her name alone.
- At the time of closing, the spouse of the buyer will be required to specifically disclaim or relinquish his or her right, title and interest to the property.
Holding Title with Others:
Tenancy in Common
- Enables each partner in the property to sell, lease or will to his/her heirs that share of the property belonging to him/her.
- Who can take title? Any number of individuals.
- Ownership Division: Any number of interests, equal or unequal.
- Who holds title? A separate legal title to his undivided interest is held by each co-owner.
- Possession: Equal right of possession.
Joint Tenancy
- Property owned by multiple individuals where if one of the owners dies, the remaining owners acquire the share of the deceased owner automatically.
- Who can take title? Any number of individuals.
- Ownership Division: Interests cannot be divided.
- Who holds title? There is only one title to the whole property.
- Possession: Equal right of possession.
Community Property
- Property owned equally between a husband and wife. Each must sign all agreements and documents of transfer.
- Who can take title? Only a husband and wife.
- Ownership Division: Interests are equal.
- Who holds title? Similar to title being in a partnership, title is held in "community."
- Possession: Equal right of possession.
Additional Ways to Hold Title:
Corporation
- A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having essentially the same as those of an individual.
- The entity has continuous existence until it is dissolved according to legal procedures. Land owned by a corporation cannot be attached for personal debts or judgments rendered against any of its shareholders.
Living Trust
- A living trust is created while an individual is alive and gives the individual control of the distribution of his or her estate.
- The individual transfers ownership of his or her property and assets into the trust.
Partnership
- A partnership is an association of two or more persons who can carry on business for profit.
- A partnership may hold title to real property in the name of the partnership with partners having an equal or an unequal interest in the property.
Trust
- A trust is an arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called beneficiaries.
