Escrow Red Flags
Plan Ahead to Avoid Closing Delays
Questions? Contact your Escrow Officer before closing. These are just a few of the things that you should watch for as closing day approaches:
POWER OF ATTORNEY AND TRUST DOCUMENTS: The use of a Power of Attorney (POA) must be approved in advance of settlement by the title company and the Lender (Buyer’s). If a POA is going to be used or the property is being held in or placed in a Trust, inform the Escrow Officer and Lender as soon as possible.
FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT OF 1980 (FIRPTA): If the Seller is not a United States citizen, please advise your customers (Buyer(s) and Seller(s)) to review the FIRPTA requirements prior to closing. Guidance should be obtained from an attorney and/or accountant.
INTERNAL REVENUE SERVICE (IRS): All real estate sale transactions must be reported to the IRS. Inform your Sellers that they will be asked to complete applicable IRS forms and provide their Social Security Number(s) or Tax Identification Number (TIN).
INVOICES DUE: If debts pertinent to the transaction are to be paid at closing and listed on the closing documents, provide copies to the Escrow Officer at least one week prior to closing. Once the documents have been approved by all required parties any subsequent modifications could cause delays.
MAIL-AWAY: If any party is unable to attend the closing, provide a physical address where the closing documents should be delivered and a contact phone number as soon as possible. Upon approval, DocuSign®, an electronic document signature platform, maybe another option for signing. Please note that some documents require a wet signature and the services of a notary.
VALID PHOTO IDENTIFICATION: At closing, one form of identification is required. Valid photo identifications include: Current U.S. Driver’s License or state-issued identification card – Current U.S. or Foreign Passport (Foreign Passport must be stamped by U.S. Immigration and Naturalization Services).
FUNDS FOR CLOSING – CASHIER CHECK OR WIRE TRANSFER REQUIRED: Cash and ACH (Automatic ClearingHouse) funds cannot be accepted. We do not automatically accept all checks. Personal checks are not immediate available funds; therefore, timelines set forth by the Federal Reserve Bank and our company are followed. If proceeds from another settlement are being used contact the escrow officer to verify the acceptance of those funds.
WIRE FRAUD: All wire instructions are sent via secure email. Changes to the instructions are uncommon. Parties should confirm wire instructions by phone using a known number before transferring funds. Links or phone numbers received in any secondary email correspondence should not be used.
We work with all parties to resolve issues that are uncovered to prevent closing delays. If any red flags are discovered, contact your Escrow Officer early in the process with any questions or concerns.