Buyer & Seller Guide

Other Participants in an Escrow Transaction

  • Published 2023-03-10
  • Est. reading time 8 Minutes
  • Author admin

In addition to the buyer, seller, lender and real estate agent(s), Escrow may involve several other participants. For example: Appraisal, Home Warranty, Home Inspection, Termite/Pest Inspection and
Disclosure Report.


If the buyer is securing a new loan for the purchase, an appraisal will be
required by the lender. An appraiser will:

  • Research the subject property as to year built, bedrooms, baths, lot size and square footage.
  • Compare data of recent sales in the subject’s neighborhood, typically within a one mile radius. The appraiser usually locates at least three (and preferably more) similar homes that have sold within the past six months. These homes are considered Comparable Properties” or “Comps” for short.
  • Field inspection is conducted in two parts: (1) the inspection of the subject property, and (2) the exterior inspection of the comparable properties.

The subject property inspection includes taking photos of the front and rear of the home (that may include portions of the yard) and photos of the street scene. The appraiser also makes an interior inspection for features and conditions which may detract from or add to the value of the home. A floor plan of the home is drawn and included while doing the inspection.


Home Warranty
Home Warranties offer advantages to both the buyer and seller. This policy protects the buyer by paying for certain repairs and costs of major mechanical systems and major appliances in the home such as heating and air conditioning. There are a variety of plans available.


Benefits of Home Warranty Coverage to the Seller

  • Home may sell faster and at a higher price
  • Optional coverage during the listing period
  • Protection from legal disputes that occur after the sale increases the marketability of home


Benefits of Home Warranty Coverage to the Buyer

  • Warranty coverage for major systems and built-in appliances
  • Protects cash flow
  • Puts a complete network of qualified service technicians at the buyer’s service
  • Low deductible

Most home warranty plans can be paid for at the close of escrow. A copy of the invoice is presented to the escrow company and it becomes part of the seller’s closing costs. FNF offers Home Warranty coverage at
or 1.800.862.6837.


Home Inspections
A home inspection is another component of the escrow process. It is a physical examination to identify material defects in the systems, structure and components of a building, such as foundations, basements and under-floor areas, exteriors, roof coverings, attic areas and roof framing, plumbing, electrical systems, heating and cooling systems, fireplaces and chimneys, and building exteriors.


Is Your Home Inspector Insured?
They should have: Professional Liability Insurance Coverage, General Liability and Workers Compensation.


How the Seller Should Prepare for a Home Inspection
The seller should have the property fully accessible, including elimination of stored objects that may prevent the inspector from accessing key components of the home. Areas of special concern are attics, crawlspaces, electric panels, closets, garages, gates/yards, furnaces and water heaters. All utilities should be on with functioning pilots lit.


Inspector’s Responsibility to the Homeowner
Respect the property. Leave the property as they found it. Answer questions about the report after
the inspection is completed. Provide a copy of the report on site.


Termite/Pest Inspection
This report is prepared by a State Certified Inspector as evidence of the existence or absence of wood destroying organisms or pests which were visible and accessible on the date the inspection was made. In almost every instance when they receive a request for an inspection the caller refers to it as a “termite” inspection. In addition to looking for subterranean termites, the inspector is also looking for signs of activity from other wood organisms such as:

  • Carpenter ants
  • Carpenter bees
  • Wood destroying fungus
  • Dry wood termites

These conditions are easy to spot and in most cases are simple and inexpensive to correct. If you aren’t certain about the condition of your property, seek assistance from a State Certified Termite Inspector.


Buyer & Seller Guide

Glossary of Terms

The following is a short glossary of commonly used terms during your escrow transaction. For a more complete glossary

Close Costs and Who Pays What

Closing costs are what the buyer and seller will pay as part of the escrow transaction. Some fees are negotiable between the seller and buyer

Real Property Tax Dates

The following schedule lists some of the more significant dates for California property taxes affecting property owners.


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