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What Is Escrow?

It is customary and prudent for a buyer and seller to have a third, disinterested party to assist them in carrying out the terms of their agreement. In California, this procedure is known as an escrow. When opening an escrow, the buyer and seller establish terms and conditions for the transfer of ownership of property. Your escrow is created shortly after you execute the contract to purchase your home. The escrow becomes the depository for all monies, instructions and documents. The Escrow Officer has the responsibility of seeing that all terms of the escrow are carried out.

NOTE: In some states, the process of completing the purchase of a home is known as the “Settlement” process. Often the seller and buyer will come together at the Settlement table where documents are signed and exchanged. There may be a settlement attorney who facilitates this process. In California, the term “Escrow” is used to describe the process of completing the sale of property.

How does the escrow process work?
The escrow holds all monies, instructions and documents for the purchase of your home, including your down payment funds and your lender´s funds and documents for the new loan. The escrow officer takes instructions based on the terms of your purchase agreement and your lender´s requirements. The escrow officer can hold inspection reports and bills for work performed as required by your purchase agreement. Other elements of the escrow include hazard insurance, title insurance and the grant deed from the seller to you. Escrow cannot be completed until the instructions (requirements) have been satisfied, and all parties have signed escrow documents.
The escrow holder´s duties include:
• Serve as the neutral agent and the liaison between all parties involved.
• Prepare the escrow instructions.
• Request a Preliminary Title Search to determine the status of title to the property.
• Comply with the lender´s requirements as specified on its instructions to escrow.
• Receive and handle purchase funds from the buyer.
• Prepare or secure the deed and documents related to the escrow.
• Prorate taxes, interest, insurance and rents.
• Secure releases of all contingencies or other conditions imposed on the escrow.
• Record the deed and any other documents.
• Request title insurance policy.
• Close the escrow pursuant to instructions supplied by the seller, buyer and lender, if any.
• Disburse funds as authorized by the instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs.
• Prepare final statements for all parties involved that account for the disposition of all funds held in the escrow account.

How do I open an escrow?
Your real estate agent will open the escrow for you. As soon as you execute your purchase agreement, your deposit is given to the title company for deposit into the escrow account. How will you know where your money has gone? Written evidence of your deposit generally is included in your copy of your purchase contract. Your funds will then be deposited in your separate escrow or trust account and processed through your local bank.

Escrow Instructions
Escrow instructions define all the conditions that must occur before the transaction can be finalized. Your escrow instructions specify, in a debit and credit format, the disposition of your purchase funds. They also provide for title protection for your home.

What information will I have to provide?
You may be asked to complete a statement of identity. Because many people have the same name, the statement of identity is used to identify the specific person in the transaction through such information as date of birth, social security number, etc. This information is kept confidential.

How long is the escrow?
The length of an escrow is determined by the terms of the purchase agreement and can range from a few days to several months. On average, it takes 30 to 45 days.

Michelle Carr Crowe: Carrying the Torch

CUPERTINO − For many people, following in the professional footsteps of a parent can be a daunting prospect that provokes fears of falling short of elevated expectations. Michelle Carr Crowe experienced similar feelings when she was first considering a career in real estate, but with a little encouragement and a lot of hard work, she found herself not merely standing in her mother’s shadow but carrying the torch. “After several years in real estate, my mom had made a name for herself as the local ‘super-agent,’” she recounts. “She wanted me to get my real estate license and join her firm, but I was worried that I wouldn’t be able to live up to her prominent reputation. When I expressed my concern to her, she told me, ‘Michelle, you care about doing things right and being honest, and that’s more important than any amount of skill or ability. It may take you some time to learn the ropes, but you already have what matters most: a caring heart.’”

Today, nearly 30 years after obtaining her real estate license, Michelle still takes pride in carrying on her mother’s professional legacy. “I’m continuing my family’s good work and helping local families make the right choices when it comes to buying and selling their homes,” she says. “I truly enjoy guiding my clients through the process toward positive, often life-changing outcomes.”

A lifetime resident of the Silicon Valley (where she lives with her husband, Steven), Michelle describes her locale as an ideal place to raise children. “I think life in the Silicon Valley prepares young people for what the world is really like,” she says. “In order to succeed in the world, children need to learn how to live alongside and collaborate with all kinds of people, which is why I think living in such a diverse area has been a valuable experience for both me and my kids.”

Outside of work, Michelle engages in a wide range of pastimes, from reading and going on nature walks to spending time with friends and family. “I’m an avid reader, and I take every chance I get to go to the library,” she says. “I also like to go on walks through the redwoods and hikes on local mountain trails.” In addition to personal hobbies, Michelle takes time to keep up with her two grown daughters, Marlene and Monique.

Michelle credits much of her professional success to her ability to keep the best interests of her clients at the forefront. “Sadly, there are a lot of people in this business who only care about getting deals through and not about what’s best for their clients,” she says. “This was actually one of my motivations for becoming an agent—I wanted to save people from the bad guys! After 29 years, I can say confidently that when you do everything with the client’s best interests in mind, everyone wins.”

When asked the first thing she’d do if she could retire tomorrow, Michelle says she would take the first flight to Hawaii. “Hawaii is my favorite place, and I like to think that I run my business in accordance with the ‘aloha spirit.’ Spending time there is a very healing experience for me, and it enables me to return to work refreshed and rejuvenated.”

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Michelle Carr Crowe and the Get Results Team provide real estate consulting services for home buyers and sellers in the Cupertino Schools neighborhood (especially San Jose with Lynbrook High) and throughout Santa Clara County. In addition to consulting, negotiating, and project managing residential sales and leases for single-family homes, condominiums, townhomes, duplexes, and fourplexes, Michelle and the Get Results Team help first-time, move-up, trophy, and move-down sellers and buyers (especially seniors) safely and smoothly navigate complex real estate transactions.

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Understanding Agency

It ́s important to understand what legal responsibilities your real estate sales person has to you and to other parties in the transactions. Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company.

1. Seller’s representative (also known as a listing agent or seller’s agent).

A seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

2. Subagent.

A subagent owes the same fiduciary duties to the agent’s principal as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not representing the buyer as a buyer ́s representative or operating in a nonagency relationship, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller.

Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.

3. Buyer’s representative (also known as a buyer ́s agent).

A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer’s rep works in the buyer’s best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer’s rep may be paid by the seller or by a commission split with the listing broker.

4. Disclosed dual agent.

Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states. In many states, consent for dual agency must be in writing. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it’s vital that all parties give their informed consent.

5. Designated agent (also called, among other things, appointed agency).

This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.

6. Nonagency relationship (called, among other things, a transaction broker or facilitator).

Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

Aloha & God Bless You,
Michelle C. Carr-Crowe and the Get RE$ult$ Team, ABR, ALHS, CDPE, RECS, SRES
Top 5% Silicon Valley Residential Real Estate Agent

San Jose Saratoga Lynbrook Homes & Cupertino Schools Experienced Experts

Just Call … (408) 252-8900


8 Steps to Getting Your Finances in Order

Develop a family budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you’ve actually spent over the past six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

Reduce your debt. Generally speaking, lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 percent and 28 percent of income, you need to get the rest of installment debt-including car loans, student loans, revolving balances on credit cards, payments on timeshare vacations, etc.-down to between 8 percent and 10 percent of your total income.

Get a handle on expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month (coffee, tips in the ubiquitous tip jars, a daily newspaper, fees for parking meters, parking tickets, movies, popcorn, sodas, etc.) You’ll probably see some great ways to save.

Increase your income. It may be necessary to take on a second, part-time job to get your income at a high enough level to qualify for the home you want. Consider selling excess “stuff” on eBay or Craigslist. Explore whether that collection of comic books, sport memorabilia or Lladro may be worth selling.

Save for a downpayment. Although it is still possible to get a mortgage with only 5 percent down–or even less in some cases–you can usually get a better rate and a lower overall cost if you put down more money to start. With the current lending environment, your goal should be to shoot for saving a minimum 20 percent downpayment. The exception may be if you have a well-established co-borrower who will contribute to the downpayment and share the risk with you.

Create a house fund. Don’t just plan on saving only whatever is left over after paying bills and having fun toward a downpayment. Instead, decide on and commit to a certain amount each month you want to save, then either auto-pay it into your savings or write yourself a check to this account when pay your other monthly bills.

Keep your job. While you needn’t remain in the same job forever to qualify for a loan, having a job for less than two years may mean you have to pay a higher interest rate. However, if you switched employers but remained in the same field, you may not have any penalty.

Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.

2008 All Worldwide Rights Reserved. All information contained in this report is deemed reliable, but not guaranteed; all principals to verify and all parties advised to seek expert tax, financial, legal and real estate advice prior to entering into any contractual agreement. If your home is listed for sale or you are in a contractual relationship with any broker/agent in any capacity and you have chosen to visit this Web site, be aware this is not a solicitation of your business. This information is provided for educational purposes to benefit members of the general public exploring a variety of real estate options, including, but not limited to, buying, selling, leasing and investing in real estate, and does not constitute, nor substitute for, legal or financial advice.

2008 All Worldwide Rights Reserved. No portion may be copied, scanned, altered or forwarded without the express written permission of Michelle C. Carr-Crowe. All violators and information thieves will be prosecuted to the full extent of all applicable laws worldwide, including but not limited to intellectual property; all financial, name, market, intellectual property, copyright and brand infringement violators will be prosecuted in all appropriate jurisdictions and sued for financial satisfaction. All information in this report is deemed reliable, but not guaranteed; all principals to verify and all parties advised to seek expert tax, financial, legal and real estate advice prior to entering into any contractual agreement.

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