As defined in the Purchase Contract -Feb2017, an Arizona home sale closing is a very specific and precise event. “Closing” is the moment of recording of transaction documents at the County Recorder office where the property is located.
An Arizona home sale transaction closing does NOT occur when the seller and/or buyer sign their respective documents. Docs signing and “closing” are totally disconnected events that are commonly separated in time by days, sometimes even a few weeks … especially for the seller. This is possible because all of the seller cost factors are known fairly early in the process, as well as the seller documents.
Where there is financing involved in the purchase, typically the buyer signs the docs for that side of the transaction just a day or two prior to closing. Lenders prefer this to be sure that information is absolutely current for the property, the buyer’s credit, and most all other details of the transaction.
Let’s review what “escrow” is, and does. Escrow is a service provided by a neutral third party, called an escrow officer, to manage “settlement” … completion of the transaction that the buyer and seller have agreed to in the form of the Purchase Contract. The process consists of:
- collecting and creating transaction documents
- acquiring and certifying signatures on those documents
- securing a title insurance policy
- prorating insurance, property tax and HOA accounts
- receiving and disbursing monies
- delivering the completed documents to the buyer and seller
- electronically delivering documents to the county Recorder
… all on behalf of the buyer and seller according to the Purchase Contract terms and conditions, as well as instructions from the buyer’s lender if financing is involved.
Buyer and seller can move forward separately but simultaneously in providing inspections, reports, loan commitments and funds, deeds and many other items, using the escrow officer as the central depositing point. When the Purchase Contract has been properly crafted, as normal for a Realtor®, the escrow officer can take many actions on their behalf without further consultation, saving time and facilitating the successful completion of the transaction … which occurs when transaction documents are electronically sent and recorded at the County Recorder’s office.