UNDERSTANDING THE BUYER’S OPENING DOCUMENTS

In the early days following the opening of your escrow, you can expect to receive a package of documents and forms from your Escrow Officer. The below is designed to take some of the confusion out of the buyer’s opening document package. Here we provide a description of these documents and a simple explanation of what they mean.

While each escrow is unique, the opening document package for a typical sale escrow is likely to include:

Supplemental Escrow Instructions

The escrow company’s Supplemental Escrow Instructions are exactly what the name implies: they are additional instructions to the escrow holder. These extra instructions address matters that your Escrow Officer needs to manage during the escrow process even though they may not have been mentioned in your original purchase contract. Sometimes the Supplemental Escrow Instructions will re-state provisions in your contract that need clarification. The escrow company’s General Provisions are also contained in the Supplemental Escrow Instructions. Together, the Supplemental Escrow Instructions and your purchase contract state all the agreements between the seller and buyer and provide your mutual instructions to your Escrow Officer.

Statement of Information

Your title insurance company will make a thorough search of the public records along with its process of examining the title to the property. The information you provide on the Statement of Information will be used to clear judgments and liens which do not directly affect you or the property. This information is confidential and will be used only to help the title company complete its work. 

Fire Insurance Information Form

If you are obtaining a new loan to purchase your property, your lender will require you to purchase fire insurance before your escrow closes. The information you supply on this form will tell your Escrow Officer which insurance agent you have chosen.

Preliminary Change of Ownership Report

This report is used by the county assessor to determine the tax basis for your property. The Department of Financial and Professional Regulation (IDFPR) requires that this document be filed with every transfer of title, but the information on the form is not recorded or made a part of any public record.
 

Vesting Worksheet

This worksheet instructs your Escrow Officer as to how you want to hold title to the property you are buying. It is a good idea to discuss your vesting with your tax advisor to be sure that your selection suits your financial and estate planning goals.

The opening phase of your escrow will progress smoothly if you promptly return the documents sent to you. If you have questions about any item, call or email your Escrow Officer. He or she is well acquainted with the documents and will be happy to explain them to you.