The escrow holder works for both the buyer and the seller. Escrow can only act according to the specific written instructions given by buyer and seller. The Escrow officers will follow the instructions specified. Among the tasks completed in Escrow are as follows:

* Receive the buyer's initial deposit, prepare escrow instructions and obtain required signatures;

* Order title search and receive preliminary title report (a report document the legitimate owner(s) of the property);

* Distribute copies of preliminary title report to all parties and obtain approval;

* Request pay-off statements from existing lenders, so new owners will not be liable;

* Obtain the seller's signature on grant deed. Hold grant deed until all terms are meet and the funds are deposited;

* Calculate prorations on property taxes, rents, insurance, or other expenses as required;

* Coordinate with buyer's lender. Order and process buyer's loan documents;

* Receive buyer's down payment funds and request funds from buyer's lender;

* Order recording of grant deed to buyer and distribute all funds (including paying off existing loans, pay required costs, such as termite completion and the release of proceeds to seller).

The buyer should have been "pre-qualified" for a specific loan amount before the purchase contract has been signed. This is the time the buyer should apply for financing right after acceptance of the offer. The buyer and the buyer's lender should be undergoing the loan approval process. The loan officer will process the application and the following events would occur:

* Obtain and review the buyer's credit report. Obtain satisfactory explanations from the buyer of any negative items;

* Verify other credit reference items, such as rent payments to a landlord;

* Verify the buyer's sources of income;

* Verify that the buyer has adequate liquid funds for his or her down payment, closing costs, and reserves;

* Obtain all supporting documentation from the buyer;

* Order an appraisal of the property, and confirm that the property's value is equal to the purchase contract sales price;

* Obtain buyer's signatures on federally required Truth-In-Lending documents;

* Submit the loan to underwriters for final approval;

* Coordinate delivery of the buyer's loan documents to the escrow officer.

While the buyer is busy handling these duties, the seller would be performing these tasks:

* Prepare detailed disclosures regarding the property's condition, including copies of warranties, permits or repair invoices for work previously done on the property;

* Make home available for physical inspection by contractor, geologist or other tradespeople as required by the purchase contract;

* Give escrow officer information on existing loans to check against title search findings;

* Make home available for inspection by licensed termite company;

* Make home available for inspection by lender's appraiser;

* Make any repairs agreed upon in purchase contract;

* Make home available for completion of any required termite work.