Navigating the Escrow Process with Tina Gronik (Part 1)
👉 Watch the full video on YouTube!
Prefer to listen? Click to hear this post!
Navigating the Escrow Process with Tina Gronik
[00:00:00] Alright everyone, thank you so much for being here today. Today we have Tina Gronik from Yavapai Title. She is one of the title agents, escrow officers that I work with, and she has graciously agreed to spend some time with us today answering questions that a lot of my clients have about escrow and how that process works.
So she is going to do her best to walk us through a transaction from beginning to end. And again, her information will be below. So if you have any questions, that is where you can go to find her contact information. And Tina is great and happy to give answers. All right? Yes. So thank you, Tina, for being here today.
I wanted to, and I meant to ask you, how long have you been doing this? [00:01:00] So I've been at Yavapai title for eight years. I have been in law for about 25 years. I used to work for attorneys And they did a lot of commercial transactions, residential transactions here in Prescott. The law firm I worked for for 14 years, and then I moved to a different law firm and worked for a sole practitioner for about five years.
Okay. Okay. So you've got a lot of knowledge. Lot of Before that I worked at the courts as a supervisor in the courtroom. So you know to the line, you know the rules law. Yeah. Well, it's kind of black and white things are, for me, black and white. That's good. That's areas, this is a black and white kind of thing, and, and there's not really any gray areas in this, and gray areas make us very nervous.
Mm-hmm. We like black and white and I [00:02:00] agree with that. It's, it's, it's, yeah. It's like we, we follow the contract. The contract is our instructions, addendums are instruction. You know, and even if I'm dealing with people that aren't using realtors, they're like, oh, well we wanna change this. Well, we need to have everybody agree on that.
So put it in writing. Exactly. Put it in writing. Yep. Yeah. I would not want your job doing for sale. My owners, again, they're, they're kind of putting you in a situation where you're, they're wanting you to be the realtor and you can't. Right. Yeah. I can say is put it in writing. Put it in writing. Third party.
Yeah. Yeah, yeah. Definitely handles the stuff for everybody. We already kind of talked a little bit about what I was hoping to kind of cover and I always tell my clients, I don't see what the title agent asks you. I don't get those documents. I can guess. So really where I wanna start with is at the beginning [00:03:00] because I send you the contract, typically it's the buyer's agent that opens escrow because the buyer's buying.
And I send you the contracts, I send you the addendums, the HOA agreement, septic addendum, well addendum, the seller compensation addendum, the buyer broker agreement. Did I miss anything? I think you good so far. Counter offers and all of that over to you, along with the buyer and seller's contact information, or at least my buyer's contact information.
And you go from there. Now, the first thing that people ask me about. Before I even send anything to you is, what is earnest money and can I lose it? So let's just start with earnest money. How does that work? Where do you put it and all of that good stuff. What can you do with it? Sure. Earnest money, we actually just hold it for [00:04:00] the escrow itself in an account in our, in our account for Yavapai title.
And you can lose it if you, you know, cancel the transaction depending on the date of the cancellation. As you well know, yes. Um, dates are important. Yes. dates are important. So really as the escrow officer, I am like the res, the I am the person responsible for depositing the funds, the documents for the transactions for the party.
And I'm an impartial third person, so I act kinda like a fiduciary. So to make sure that, you know, the transaction goes smoothly and finishes. I don't know if you wanna go into. Yes, you can lose it, but normally if you're within your time dates, you will get your money back, your [00:05:00] earnest money back.
Yeah. Let's not go into that. That can be a whole another conversation about how people can lose their earnest money. It's a whole thing, and as I was telling you, and I tell my clients. You, the title agent is the spoke in the wheel of the transaction. Because you talk to everybody. You talk to the buyer's agent, the buyers, the seller's agent, the seller, the lender you talk to, everybody you call.
If you need something from like the septic company, they send you their report. You reach out to the well company if you need something from them because you are doing all of those transfers and it has to be recorded. You deal with all of that. So I think of you literally as a spoke in an old fashioned, you know, covered wagon wheel.
You know, there's lots of pieces going out from you, but you're the center of that wheel and you really can't do anything unless we give you information, which. You know, [00:06:00] and instruction. I, I mean that's really what we work off of is the contract, is our instructions on to, you know, finish the transaction.
So that's one of the most important things that we have to have an instruction to do certain things. Okay. Can you talk about that a little bit more, what that means? Sure. so when we open, we open the escrow and I send out these opening packages to both buyer and seller. Okay, what are those? And in those opening, okay, perfect.
Thank you, . In those opening packages are just general information that we wanna get from the buyer and the seller. Let's start with the seller. The seller, I need to know if they have a mortgage on their property that they're gonna need to pay off. And who that mortgage company is. Who that lender is, what their amount estimated is on, how much they still owe and their loan information so I can contact them to get that [00:07:00] payoff.
Ah, okay. For the closing, I forgot. I forgot about that. Yeah. Yeah. So that's one of the things I do for the sellers. And then we also, you know, gather their information because we will do a 1099 for them. Oh yeah, we send them a 1099 at the end after closing. So we need to get their, you know, social security information number and or their business license number.
Oh, okay. The TIN. So. So those are the couple things that I need. And basically other than that, for the seller, those, those are the things that I really need to get from them. And those are all on my forms that I send to them. Either DocuSign or I mail those to them. Okay. And can you explain what DocuSign is?
DocuSign is just a easy way to go through your documents and I send them out to you. [00:08:00] They go to that person, that person reviews and fills out that form, and then it comes automatically back to me. Okay, so it's electronic, so they don't have, it's an electronic, we don't have to kill another. So wherever you are, you know, even I think, you know, if, if you're overseas or on vacation or.
Yeah. Anywhere you can do DocuSign. Yep. Okay, cool. I like it. Do not have to download that DocuSign app at all. You can just literally get on it, fill out your forms, and then it send, when it says finish, it comes right back to me. So it's really, we've made it really easy that way to do For both buyers and sellers.
Okay, so what would buyers be getting initially from you? So buyers are also getting an opening package. We call 'em both opening packages, the buyer's information. We need to know what their address is now, if they're gonna use the new home as their address after closing, or [00:09:00] is it going to be a PO box or something else?
How they're going to hold title. That's the most important thing with them. Vesting title and Arizona is a community property state, so we tend to, most people tend to do, you know, husband and wife as community property with right of survivorship. However, you can do whatever you want. A lot of people have a trust, they wanna put it in a trust.
We can do that for them right at closing. If you have a lender, you'll probably need to check with your lender to see if your lender is okay with you putting it in your trust if you have a loan. Okay. That's a good question because they're not always, I know I did one recently and it wasn't investment property, but the lender's like, I don't want it in a trust.
Right. So like, okay. So if it's okay with the lender after we, sometimes they don't want it in the trust or their deed of trust, however we can put it into their trust. [00:10:00] So we record the deed, the deed of trust, and then we record another deed after the deed of trust, putting it into their trust. And the lender's sometimes okay with that.
So you just gotta, it depends on your lender and if they're okay with that or not and we'll do that for you. Okay. And that can be done all at one time. All at one time at closing. Okay. Cool. Cool. I like it. I like it. That makes it, it just is, the title stuff comes up a lot with people and nowadays you've got a lot of different variables and variations in relationships you've got
People that are not married, but buying together. You have people that are co-signing with each other. You have, he's the husband or the wife is getting the loan, but they're both gonna be on title. There's friends were buying together. There's a lot of variables. So that is important that [00:11:00] they understand what that really means.
Because what it means is it impacts if somebody dies basically. Right. Right. So talk about that. If you don't have a right of survivorship for when, when somebody does pass away, say you, you and I wanna hold title together. We can do joint tenants with right of survivorship. But if you don't have that right of survivorship on there, you're gonna have to go into a probate situation.
If one of them dies, yes. We don't want that. We do not want that. We don't want that. You wanna be able to know that your house is your house. And then you also have the tenants in common where everybody owns a certain percentage as tenants in common. So you and I could be tenants in common. You own a 50% and I own a 50% undivided interest.
Okay. Does that have right of survivorship at all? That does not have right of survivorship. Ah, so that does end up in probate unless mm-hmm. There's something else dealt, dealt with. Okay. Okay. [00:12:00] So once you, I know that, you know, those are things that we say, talk to your attorney about if you're kind of confused on how to hold title and what's gonna be the best scenario for you?
Again, Arizona is a right of survivor. It's a right of survivorship state, so. Community property state. I like it. I like it. I'm gonna do something really quick. I'm gonna pull up, ah, maybe I will. Um, so that's basically their first contact with you, is that opening those opening documents and, yeah, actually the first, very, very first contact is I reach out to them with wire instruction for buyers in case they need to send their earnest money to me.
I'll send their wire instructions to them. Those wire instructions do come encrypted. So it's safe between, you know that internet is crazy out there? Yes, it is. But when we email it to them, it goes through encryption and then it [00:13:00] gets to you and you have to unencrypt it, which is easy to do when you open it
unencrypt. Basically just automatically. Oh, okay. Okay. Um, but it is safe. And then we always want you to make sure and call and confirm those wire instructions because we don't change those wire instructions during the whole course of the escrow. If you get an email saying, oh, here's um, new wire instructions, because all of a sudden they changed, that's a big red flag saying that somebody's trying to take your money from you.
So you need to always call your escrow officer and say, Hey, I got this email saying. I got different wire instructions. Is that true? And I'll say 99 and a half times out of 10. A hundred. No, that's not true. Okay. That is good to know because again, wire fraud is alive and well. And again, not everybody can [00:14:00] come to your office to give you their
earnest money and a lot of people, I know that there's also like an app where people can, some title agencies have an app, where somehow they take a picture. I don't know how they do it on the app. We have that as well. We, it's called Bank Shop and you can take a picture of your check and send it to us that way, but you make sure you have to have your escrow number on it or it won't come through, through that bank app.
It's called Bank Shop. Okay, that's cool. That's because it just makes it easier for people again, that are, say for instance, can't get off 'cause you guys are Monday through Friday, what, 8 to 4:30, 9 to 5:30, whatever. And so some people work and can't pop in or again, they're out of the city, out of the area.
Okay. I like it. So I'm gonna grab my little spreadsheet here and go, okay, how does this work? So. One of the first [00:15:00] documents that my clients get is the title insurance or the title commitment. Tell me what that is and how do you get it? What do you do? What are you doing behind the scenes to get this document for them?
So when I get your contract, I open escrow and I order the title commitment. There's two types of title insurance, a loan policy, and an owner's policy. The loan policy protects the lender for the amount of the loan while the owner's policy protects you, the person, the buyer, for your investment in the property.
So, you know, in both cases, the title process covers lots of public search records to make sure that title to the property is clear and covers against any future losses if a claim is made on the property. Okay, and how long is that? Insurance that you have to purchase home insurance. So this [00:16:00] is only to do with the title insurance protects the potential loss of your home.
Basically. How, how would they do that? How? Because somebody else claims title, right? And they're like, we own this house, not you. Correct. Right. Yeah. Um, so yeah. So title insurance differs from like regular, you know, casualty insurance that ensures what has occurred in the past, not what could happen in the future.
So title companies are careful to review their title process, minimize risk, and prevent losses. Caused by defects in the title. So that's what it's all about really. If there's a easement on the property, we wanna make sure that easement is correctly recorded and not an issue. If there's a well agreement on the property, we have to let the buyer know about that.
And then if there's a [00:17:00] well agreement, then obviously they need to get with all those other people that have that well agreement. And get into that. So, but that's way beyond some of the basic stuff, Those are rare cases that there's well agreements between different people on properties. I actually had one of those in January where it was a new build and the builder put in a Well that was gonna be a shared, well, a shared, well, yes.
So I don't remem I think it was gonna be three. Potential properties, we're gonna be using that one. Well, so that would be an example of they have to be an agreement and that has to be like transferred from the current owner to the new owner and Correct. And all those people, all those parties have to agree and that agreement has to get recorded at closing.
Ah, okay. All the new buyers. Right. Okay. See, there's all this stuff you're doing behind [00:18:00] the scenes, and that's not the same as, I'm sorry if I, we already said this, but title, commitment. What's title? Commitment. The title commitment is the actual, like it's your homeowner's policy, so it, it'll provide same coverage as a standard owner's policy and a residential policy.
There'll be exclusions on it of Schedule B. Including like restrictive covenant violations, post policy, encroachments, post policy, living trust coverage map is not consistent with the legal description, building permit violations. So any of those things that happened in the past that never got cleared up, we're gonna have to have you get that cleared up.
Ah, okay. I actually had a client that had five lots and they had been merged into one. One big lot, and three of [00:19:00] the lots were vacant, and so their thought was, we're gonna split the three vacant ones off from the two front ones. But when they went to do that, they found out a whole bunch of stuff.
Such as the addition that was added on behind the garage was never permitted and it was too close to the lot lines. So if, if they split it, it would be out of compliance and they would have to tear it down. Well, they ended up tearing it down. They found out all kinds of stuff. It was crazy. And I'm like, I felt bad that they opened that can of worms.
But that's, and that was not covered by their in title commitment insurance or any of that, it was like, correct. They just had to pay for it. So that, that's interesting. So then do you look for, or when you are doing your title search and stuff, what if you find a lien on the property that hasn't been reported by the current seller?[00:20:00]
So then we would put that as a requirement in our, in our title commitment as a requirement to be cleared before we can close. Okay. Okay. And I basically, upon the receipt of the title order, my title, people start their search and we have a title plant. It's what it was, is, is what it's called, where they go to the title plant, look in that title plant, and create what is called a chain of title on the property to be insured.
It's basically a list of every recorded document that affects the title to the property, as well as other unrecorded documents or other matters such as judgments, bankruptcy, real property taxes, things like that. It extends from the date of the order back to either the last insurance policy the company issued on the subject property, or [00:21:00] to a government patent.
Which conveyed the property to the first individual owner. So it's like a history of the property. Wow. Wow. I had a friend who, her family owned a farm in Coolidge, and they'd owned it for well over a hundred years before they started doing a lot of title recording and stuff like that. So when she went to sell their farm.
It was a heck of a deal with title. They had a hard time tracking some of that stuff 'cause it would been so long and had been in the family for a hundred plus years. And That's right. That was, that was pretty, that was interesting. I was, she was kind of sharing it as she was in the process of selling and it was really an interesting process and obviously challenging.
Yes. So when we re, when I received the title [00:22:00] commitment back from my title people, it's a commitment and then they summarize all the things that I need to do, which are the requirements that matters, that affect the property, and there'll be need to be addressed prior to closing, such as the judgments, the liens, mortgages, and other
adverse title matters. Defects in Title UCC filings. Oh my God. And we both know. Yes. Yes. Well, we'll talk about you. Yeah, we'll talk about, so, okay. Since you brought it up, what is that? Is that A UCC filing is usually filed when there's a solar on the property and has not been paid off. solar.
a lot of times the company that sells the solar to the buyer. File A UCC lien and showing that there's a lien on the property that [00:23:00] way, and then we know that the, there's a lien on the property. However, you know, in some cases sellers think that they've paid that off. Yeah, we heard that. Or don't.
That it has been paid off. That's right. We had that. We just had that. Yeah. Oh, oh my gosh. I know. They're like, well, I paid it. Maybe not. So, yeah, so that is, and if it is truly paid off solar, do you ever see anything, uccs ever? If it's paid off and completely owned, UCCS will be filed. Then they'll send a UCC termination to me for filing at closing.
Okay. Okay. Because I do have, before closing, of course, I have another listing coming on that has solar, but it's paid for. She confirmed that. Mm-hmm. So there would still be a UCC transfer that would happen at, during closing, if it's been paid off there, should the UCC termination should have already been filed, [00:24:00] but a lot of solar companies.
Tend not to do that right away. They usually are 30 to 60 days out. So if she just paid it off it, it may come up in the title commitment that there's still a UCC terminate, UCC out there financing statement. And then it'll be on the title commitment, and then we'll have to clear that. Got it.
Got it. Okay. Good to know. Yeah. These are all the kind of things that are going on behind the scenes that I don't really know about, and most of the times. It's the solar that hangs people up because solar companies have been not so reliable here in the state of Arizona. so yeah. So what other kind, okay.
And again, you're the spoke of the wheel, so what other types of things? Anytime. I know every time that we do an addendum, we've gotta send a copy to you because it's probably affecting. The closing date or a credit or purchase price, correct? [00:25:00] Correct. And again, this is instructions. Instructions for me to change?
Yeah. The loan amount possibly or the purchase price itself or anything else like that with the addendum. Always need the addendum signed by everybody to make that nice and smooth. So then I can then amend the commitment, send it off to my title people, for them to change that amount. So then they, we send that new commitment to the lender and or the owner if we need to.
I did not know that. Do we get a notice? I get. I don't know. I don't know that I get a new one when, I don't know if I always send a new one to you because in the end, I mean, I can send it to you. No, I don't. I don't need it. No more paperwork. Thank you. No more papers. Like I think that's the most realtors say no.
Yeah, yeah. No, no. It's okay. I don't need it. But the, but the buyer, the, the [00:26:00] new owner will get that. Okay. And the lender gets that? Yes. Okay. Okay. Cool. Cool. And then. What is your interaction with the lender? How do you, and what are you looking for? Just what do you and the lender, what are you guys dealing with together?
Well, I just, for the example, I just opened one today and I needed to send the actual contract to the lender because they didn't use a realtor in this case. However, usually. When realtors are involved, the realtor will send the contract to the lender. And any addends, we should, we should, we should, but it doesn't always happen.
And so I reach out and say, hi, I am Tina. I'm gonna be your escrow officer. I need to get a lender request from you where they have a worksheet that they send to me saying I need a title commitment. Sometimes that not, you [00:27:00] know, that is a different amount than what's on your contract by, you know, a couple dollars here and there.
Say, you know, it's 475 for the price of the, the purchase price, and they need a, they need. They're saying that on the contract they only need a $285,000 loan, but they qualified for a $290,000 loan. So the lender usually does that $290,000 loan. Does that make sense? Depending on what they qualify for.
Well, I'm for a little bit more. Yes, exactly. Correct. And it'll cover some of their costs. Yes. Okay. Okay. I like it. And then I, so once I get that commitment, I send it out to the buyer and seller with a receipt. The buyer, I send the Schedule B items, which are all the exceptions to the title insurance coverage, such as easements, rights of ways, subdivision covenants, restrictions.
Those [00:28:00] won't be covered obviously in that title insurance policy, right? 'cause it's a easement. So I'll send the Schedule B items to the buyer with a receipt. They will sign that receipt, send it back to me. And that's usually via DocuSign. Some people don't want DocuSign, which is fine with me.
So then what do you do? Do you have to mail it out? I'll mail it out. Mm-hmm. And they'll mail it back. Do they ever, ever come in the office and meet with you to sign those type of things? A lot of times a lot of people do just come in and sign instead of, they're like, no, no, I'm not good with the computer, so can I, I'm close by.
Can I just come in and sign and get that paperwork done? You bet. Anytime. Right. Well, and I try to pick title agencies that are close to either the seller or the buyer or both because it just, again, in that case. They can come to the office and sign [00:29:00] documents, right? Because if they can't, especially the closing documents, on the buyer's side, they have to pay for a mobile notary, and that's extra expense
So whenever we can minimize some of that, I like to just use, you know, title agencies that are close to where the transaction's actually happening, you know? And the nice thing about us is, and that kinda goes for sellers too, they'll have to pay, if they're out of the state, they'll have to pay for a notary as well.
Yeah. So, but if they're in state, we have pioneer title is our sister company. That's our. That's good to know. And then we can usually send documents to one of the offices in Arizona anywhere pretty much. And get things signed. And then there's no charge to either buyer or seller if they go into that office.
Nice. Very nice. And again, people don't understand, but it's all those little price, [00:30:00] all those little fees add up. And so a mobile notary, I think 175 is the lowest I've ever seen. And it could be more, you know, and lately I've not seen one less than $200. Oh. So there you go. It's, it's $200 when you're already paying a lot of other fees for closing and your down payment.
So yeah.
💡 Ready to take the next step?
📘 Grab our free guides to help you make a smart purchase:
🎯 Selling your home is a major milestone — and the right guidance can make all the difference.
📘 Grab both of our free guides to help you feel confident, informed, and ready to sell faster and smarter:
