I was going to write a post directed towards first time homebuyers to inform them of the trials and tribulations of the escrow process, that liminal period between having your offer accepted and getting those keys in your hand.
I was going to use an analogy comparing to escrow to hell. Or to war. But I didn’t want to scare anyone away from the prospect of buying a home. Though, I may have just done that by merely referencing war and hell. Oops!
Instead, I will compare escrow to a courtship! Courtship is fun, right?
I often caution buyers not to fall in love with a house. They can like it. In fact, they better at least like the house they are making an offer on. They can like it. They can “like-like” it. They can flirt with it. Tease it. Exchange come-hither looks. Who knows, there might even be a one night stand, but do not fall in love with it! (Because escrow is hell! No, no, no…escrow is courtship! Stay on message).
My point is that anything can happen during an escrow. You may find out that the house you like (not love) has a faulty foundation or has oil seeping into the ground. You might lose your job, and then you won’t qualify for a loan. You might try to negotiate mid-escrow and have the seller decide to stop a-courtin’ you. Anything can happen.
In clinical terms, escrow is the period when a neutral third party (the escrow company) holds funds and paperwork while both sides check each other out and make sure this rather big transaction is going to benefit both. But, it is also a lot like courtship.
And, it is a trying, stressful period. Your lender is going to look under every nook and cranny of your financial and credit history to make sure it is okay to loan you A LOT of money to pay back over the next 30 odd years. They are going to ask you invasive questions about that bounced check in 1997 or the credit card you signed up for at the student center and made a late payment on you senior year of college. It doesn’t matter how upstanding you are NOW, they will find something to make you feel bad.
What I really want to say, is that something will come up during your escrow period that causes stress and concern. And it is better you know that going in to it. It is like finding out that guy you have been dating makes awful and funny noises when he eats. It is the point when you have decide to stick with it ditch it.
Once you, as the buyer, lift your inspection and financing contingencies, you are closer. Now, it is like being engaged. Backing out as this point is a big deal. You are at risk of losing your deposit money (or a big fat diamond ring). But, that probably won’t happen and the happy day is on the horizon. Like getting ready for that big day, there is still a lot of last minute scrambling, expenses and paperwork, but it is all in the spirit of bringing an end to the escrow/courtship and getting on with your normal life.
So, when can you fall in love with the house? When I hand you the keys and home is yours. The courtship is over and a hopefully lifelong union between you and your new home may begin. Congratulations…you made it through escrow!