Buyers and Sellers: Types of Escrow

Manufactured Homes Escrow
Sincere Escrow has earned a reputation for excellence and is widely regarded as an experienced Mobile Home Escrow Agent in Southern California. Mobile homes can be located either within mobile home parks or upon privately owned real property. If a mobile home has been, or is in the process of being, installed upon a permanent foundation system, it is legally transformed into and becomes defined as real property. All of these circumstances will affect the way in which a transaction for the transfer of a mobile home is handled. Escrow officers handling these transactions must be very familiar with the titling and transfer requirements of the Department of Housing and Community Development of the State of California.

Residential Escrow
A residential escrow is normally the sale or purchase of a single-family residence or condominium. In this escrow, the escrow officer is working with a buyer, seller, and their real estate agents to conduct a timely closing. The escrow officer serves as a communication link between all the parties in this transaction: the principals, their realtors, the lender, Title Company, an insurance agent and any other party that may be involved.
The escrow officer will comply with instructions from the Buyer's lender as specified in the escrow instructions and will communicate with the seller's lender to obtain payoff information on any existing liens. All documents required will be prepared; all necessary releases will be obtained; all pro-rations will be calculated.
When all of the instructions of both buyer and seller have been carried out, Sincere will "close the escrow". That is to say, record all documents and disburse funds as specified. At closing, the escrow officer will prepare a final closing statement for both buyer and seller, giving an exact accounting of all funds deposited into escrow.

Unimproved Land
Unimproved land in real estate is defined as land that does not have certain basic required services necessary to utilize it for other purposes. These include electricity, telephone, street access, or water available.

Bulk Sales
A bulk sale generally involves the sale of a business and, if properly handled, serves to protect the creditors of the seller of the business and the purchaser of the business. The statutes governing bulk sales require a notice to be recorded and published which gives the creditors of the seller an opportunity to file claims with the escrow holder for amounts due them for providing goods and/or services to the business. An escrow is legally required for the transfer of any license that comes under the jurisdiction of the Department of Alcoholic Beverage Control of the State of California. These include all beer, wine and liquor licenses issued for off sale purposes.

These transactions require that a notice of the transfer be recorded and published so that creditors of the transferor may have the opportunity to file claims with the escrow holder. Extensive knowledge of the rules and regulations that govern these transfers is essential for the expedient and successful processing of these escrows. Sincere Escrow has this experience.

Commercial Property
Sincere Escrow recognizes that there is no such thing as an easy commercial transaction. Each transaction is unique. The main role of the Escrow Officer becomes that of a coordinator and problem solver. Handling commercial escrows requires unique skills on the part of the escrow company.

We handle all forms of commercial escrow, including developer site acquisitions, business opportunity escrows, and stock transfers. Our team has a solid understanding of figures, interpretations, inclusions, contracts and financial, civic, state, city and county codes that permeate escrow transactions. Types of commercial escrows we handle include:

  • Commercial Properties
  • Industrial Facilities
  • Developer Site Acquisitions
  • Tract Sales
  • Business Opportunity Escrows
  • Stock Transfers

Refinance Escrows
One escrow specialization is "refinance escrows". The refinance escrow is typically more streamlined than a resale escrow. The homeowner does not have to have a termite inspection or purchase a home warranty. There are fewer parties involved in the transaction, so communication moves a little faster. Sincere Escrow processes hundreds of Refinance Escrows each year. We are experienced in providing safe and timely closings.

1031 Exchanges
A 1031 exchange allows you to defer the payment of capital gains taxes associated with real estate transactions. By selling one property and buying a higher-priced property, you can also get additional depreciation deductions, which can act to increase your after-tax income.

Several rules must be followed in order to qualify a real estate transaction as a 1031 exchange. First, only property held for business or investment purposes can be used in a 1031 exchange, and both properties in the transaction must be of "like kind". Like kind property is real estate or other tangible property that is similar in nature or classification.

Exchange Types include:

1. Delayed Exchange was codified in the 1984 Tax Reform Act; and it is by far the most common type of exchange. After the closing on the sale of your property you have 45 days in which to identify replacement property (or properties), and 180 days in which to close on the purchase of the replacement property.

2. Reverse Exchange is simply the reverse of a delayed exchange. This occurs when an investor identifies and purchases replacement property prior to the sale of property he relinquishes. Federal guidelines for a reverse exchange were issued September 15, 2000 so we have safe harbor rules to follow.

3. Improvement Exchange allows the investor to construct a new replacement property within certain guidelines including time constraints.