CLIENT LOG-IN
800.519.5893 Ext. 1
  • Search
    • Arizona Home Search Registration
    • Search AZ Homes
    • Arizona Cities & Towns
    • Featured Luxe Listings
    • Paradise Valley Luxury Rentals
    • Scottsdale Luxury Rentals
    • Phoenix Metro New Home Search
    • Multi-Family Properties
  • Resources
    • Buyers
      • Home Buyer Insight
      • Luxe Buyer Advocacy
      • Relocating to Scottsdale
      • Relocating to Arizona
      • Get a Home Loan
      • Home Purchase Resources
      • Arizona Luxury Home Financing
      • Ways to Take Title in Arizona
      • San Diego Real Estate Broker
    • Sellers
      • Home Seller Insight
      • Arizona Home Valuation
      • Arizona Expired Real Estate Listing Audit
    • Arizona Contractors & Real Estate Vendors
    • Arizona Luxury Home Resources
    • FSBO Rescue Guide
    • Real Estate Agent Resources
      • Luxe Agent Referral Program
  • Luxe Agents
    • Phoenix Metro & Surrounding Cities
    • Prescott, AZ
    • Tucson, AZ
    • Flagstaff, AZ
    • Top Luxe Agent
    • Top Luxe Team
  • Blog
  • CAREERS
  • Contact Us
    • About

Arizona Escrow Process Explained

March 30th, 2017

Home > Arizona Real Estate News > Arizona Escrow Process Explained
August 2019 Phoenix Real Estate Report

So, what the heck does “escrow” mean anyway?  Well, an escrow is generally defined as:

A process wherein a buyer and seller provide documents, instructions and funds to a neutral third party (title company or escrow company) until certain conditions are fulfilled.

In Arizona, a buyer doesn’t pay a seller directly for the property, but rather deposits funds with a title company–the title company, acting as an intermediary, handles all funds and verifies that all written instructions in the contract have been met.  Back East and in some other parts of the country, attorney’s are used to handle the sale, but in Arizona, we use title or escrow companies.  Every escrow may be slightly different depending upon the type of property involved, but here is a snapshot of the escrow process for a single family home that lies within an HOA (homeowner’s association)–keep in mind that there are many other minor tasks that the escrow officer will complete before the escrow can close/record.

Arizona Escrow Process Explained

  1. Buyer’s agent delivers a fully signed Residential Purchase Contract to the title company along with the earnest deposit.  Typically, the contract will be sent by email and the earnest funds will be picked up by a runner service sent by the title company (if the deposit is in the form of a check) or the funds will be wired by the buyer directly to the title company.
  2. The escrow officer will open the escrow and will send out an earnest money receipt to all parties.
  3. The escrow officer will send out opening packages to the buyer and seller.  The opening packages include a request for contact information, sellers loan pay-off information, completion of an identity statement, etc.
  4. The escrow officer will order the title commitment and the HOA demand.  The HOA demand is a request for the HOA fees such as the disclosure and transfer fees and it’s a request to send pertinent information to the buyer such as the HOA financials and CC&R’s (covenants, codes and restrictions).  The title commitment will only be issued once the property records have been researched and examined to be sure that clear title can be issued.  If there are items that must be cleared up before title insurance can be issued, those items will be listed on the title commitment.
  5. The escrow officer will work with all parties to clear/satisfy all requirements on the title commitment.
  6. If the buyer is obtaining a loan, the lender will send instructions to the escrow officer and once the lenders loan documents are received by title, the escrow officer will prepare the HUD-1 settlement statement–soon to be called the Closing Disclosure.  The settlement statement lists all the debits and credits for the purchase/sale and the lender must approve the settlement statement before the buyer can sign.  Typically, the seller may sign well in advance of the buyer, but if the lenders loan package contains documents that require the sellers signature, the seller will sign around the same time as the buyer.
  7. Once the buyer signs the loan/escrow documents, the loan package will be sent back to the lender for review.  If everything looks okay, the lender will wire funds to the title company.  The buyers funds are typically delivered via a wire transfer or cashier’s check the day before closing.
  8. Once the title company is in receipt of the lenders funds, the escrow officer will release the closing package to the Maricopa County Recorder’s Office and once key documents are recorded, the buyer becomes the new owner of the property!

Again, there are other steps to a successful escrow, but these are the major points.  In item # 6, I mentioned a change regarding the settlement statement–this change is supposed to take effect on August 1, 2015.  Here is a brief synopsis of the upcoming changes:

The Consumer Financial Protection Bureau’s (CFPB) rule, which integrates forms required by the Truth-in-Lending Act (TILA) and the Real Estate Settlement and Procedures Act (RESPA), is supposed to go into effect no later than August 1, 2015.  In a nutshell, the HUD-1 settlement statement and final Truth-in-Lending disclosure will now be combined into one document called the Closing Disclosure–this disclosure must be provided to the buyer no later than three days prior to the close of escrow and the buyer must be given up to three days to review the Closing Disclosure.  This new change is going to greatly impact the length of escrows and the overall process that occurs just prior to closing.

Here is a timeline of the Three-Day Closing Disclosure Rule which shows when disclosures are due and when the disclosures must be mailed (unless the lender will use email)–this handout was provided by the American Land Title Association.  Here is an example of a Sample Closing Disclosure which shows the combined TIL and HUD-1.

If you’d like a referral of a great escrow officer/title company, here are four that I have had great success with:

  • First AZ Title, Deanna Lee, [email protected]  480.385.6433
  • Clear Title, Jaime Horst, [email protected]  480.278.8450

Filed Under: Arizona Real Estate News, Home Buyer Tips, Home Seller Tips Tagged With: Arizona Home Seller Tips, Arizona Real Estate News, AZ Home Buyer Tips, Scottsdale Home Buyer, Scottsdale Home Seller

About Luxe Real Estate Group

The Luxe Real Estate Group is a boutique firm offering residential and commercial clients the highest level of service and expertise in the industry. The agents of Luxe form a dynamic, hard-working and dedicated team who continually strive to exceed client expectations.. If you are thinking of buying or selling an Arizona home and would like to discuss your needs, find a Luxe agent now.

You Might Also Like

Phoenix metro real estate update Feb 2023

Phoenix Metro Real Estate Update | Feb 2023

February 28th, 2023
For the first time in many months, total active inventory has fallen below 15,000 units. As of February 28, there are 14,800 active listings across the...
Read more
Phoenix metro real estate update July 2022

Phoenix Metro Real Estate Update | July 2022

July 30th, 2022
Housing inventory around the valley is on the rise and sellers are scrambling to adjust as home values start creeping down. Time to review our Phoenix...
Read more

Sign-up to receive free market updates from luxerealestategroup.com

We will never send you spam
Privacy Policy

  • Facebook
  • LinkedIn
  • Pinterest
  • Twitter
· Luxe Real Estate Group, LLC. All Rights Reserved. ·
Luxe Real Estate Group ADRE License# LC586004000
Jay Martinez ADRE License# BR107652000
Privacy Policy | Cookie Policy | Terms of Use | Site Map

We are using cookies to give you the best experience on our website.

You can find out more about which cookies we are using or switch them off in settings.

Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.

Cookie Policy

Learn more about our Cookie Policy.