What is title and escrow?

Raziel Ungar

Raziel Ungar

January 10th, 2023 - 21 min read

In this video

The purpose of the title and escrow process
The difference between title and escrow
How escrow fees are determined
What title insurance is and why you should have it
Who pays for escrow fees, and what they include
As the client, what you can expect from the moment the offer is accepted, up through closing
What sellers can expect during escrow
What buyers can expect during escrow, especially if you're going through it for the first time
Who else supports the escrow officer behind the scenes
How to prevent wire fraud
Can buyers or sellers use DocuSign for closing?
Do buyers and sellers need to be somewhere in person for the closing process?
Tips buyers should be aware of for insurance, and bridge loans
What is a grant deed? Is it an important piece of paper?
Documents - real and shady - you'll get in the mail after closing
An overview of the neutral status of the title company
How to choose a title company
Common title insurance claims
When a lien is identified post-closing
Other types of liens: tax liens, IRS liens, business liens, and personal liens
The Statement of Information, and how it can eliminate any potential liens that are of record
Property taxes and the supplemental property tax

Title and escrow are words that aren't too descriptive, but agents and the professionals surrounding a home purchase or sale toss them around a lot.

In this video, where I interview Cirina Ippolito, you'll get a sense of what exactly is title and escrow, why it's important, what to be aware of to protect yourself, an overview on the paperwork involved, your participation whether as a buyer or seller, property taxes, and liens. I hope you find it useful and informative. For a deeper understanding of the escrow process as a seller, check out my article You’ve accepted an Offer for your home or, if you are a buyer, check out my article What Happens When Your Offer Is Accepted. If you're thinking about buying or selling real estate in San Mateo County, or need a referral, I'd love to connect.

Raziel Ungar: Hi everyone. I'm Raziel Ungar and I'm here with Cirina Ippolito: of Fidelity National Title. Thanks for joining us today, Cirina.

Cirina Ippolito: Thanks so much for having me.

Raziel Ungar: So the purpose of this video is just to hopefully give you an idea of what is the title and escrow process. Cirina has been in the business for 37 years and my hope is over the next little bit people will be more familiar with what is the process, whether you're a first-time buyer or a first-time seller, so you can feel more comfortable. Can you tell us a little bit about what is title and escrow? What's the purpose of the process?

Cirina Ippolito: Basically we are a third party that's neutral, a fiduciary, and we manage documents and funds between buyers and sellers and their lender if they have a lender. We make sure that we deliver the deed to the buyer to transfer clear title to the buyer once we have the funds available to give to the seller. So basically we're holding money and we're holding documents and once all of the terms of the contractor are met, the lender has funded, the buyers have brought in their funds and we have the ability to transfer title clear of any liens or encumbrances, then we give the sellers money and we give the buyer the home.

Raziel Ungar: Can you talk about what is title and what is escrow and whether they are the same or are they different?

Cirina Ippolito: No, they're different.

Raziel Ungar: Because we use them interchangeably a lot.

Cirina Ippolito: Yes. So in Northern California, the title and escrow company is one company, and in other territories, they may be different and may have a separate title company and a separate escrow company. So a title company prepares a preliminary title report, which shows the current status of the title, what is of record, any liens and encumbrances, and who the current owners are. Once escrow closes, we issue a title policy, which ensures the new buyer and ensures the new lender of a lien-free title. An escrow company specifically handles the funds, so the deposit and dispersing of the lender's funds and buyer's funds, paying off the existing liens if there are any.

Raziel Ungar: So Northern California's all under the same roof, which is obviously my experience.

Cirina Ippolito: Yes.

Raziel Ungar: And it's like they're from the same ownership as well too. Is that correct?

Cirina Ippolito: Correct.

Raziel Ungar: And talk a little bit about fees, just to give people an idea of... in my experience, it's usually like several thousand dollars depending on the size of the transaction.

Cirina Ippolito: Correct.

Raziel Ungar: It's a sliding scale and that's kind of regardless of whichever title company that one's working with.

Cirina Ippolito: Correct. So we're all governed by the department of insurance. We file a rate that we all have to file. It's a sliding scale based on the liability of the purchase price of the home, and if you have a lender on the loan amount and basically it slides depending on those values.

Raziel Ungar: Got it. Talk a little bit about title insurance, what it is, and why people should have it because I think that's kind of confusing for a lot of people.

Cirina Ippolito: Yes. So title insurance, it's a one-time fee, which a lot of people don't know that. They think, oh my gosh, it's so expensive. It's this large premium, I don't know if I really need it. Basically, it's the largest investment you'll ever make in your life so having it insured is really important. It ensures you of any possible liens or ownership issues from, for example, a prior owner. Maybe they were divorced and we didn't know about their spouse. Maybe there's someone that passed away and there are heirs that now come into play that say, you know what? This property is really supposedly mine. So your title insurance protects you from that.

Raziel Ungar: Got it. And it's required that you buy it, right? By the lender.

Cirina Ippolito: The owner's policy is not required, but again, highly recommended. The lender, if you have a lender on a transaction, you must get title insurance because the lender wants their lien to be in first position and to be insured.

Raziel Ungar: How often do you see a buyer not buying a policy? Because at least in my experience in hundreds of transactions, I don't think I've ever seen someone not purchase it.

Cirina Ippolito: I've only seen a handful in 37 years. Consumers are really smart. They look online. There's a lot of information out there that says, oh, you don't really need title insurance. However, it only takes one claim to see how important it is. The amount of your premium that you pay for title insurance is far less than even a visit to an attorney if you do have an issue or claim, obviously.

Raziel Ungar: So the home buyer will buy the title policy, they'll buy an owner's policy if it's required by their lender. And if it's a cash transaction, then you would just buy a title policy.

Cirina Ippolito: The owner's policy.

Raziel Ungar: The owner's policy.

Cirina Ippolito: Correct.

Cirina Ippolito: And that's in San Mateo County. In other counties, depending on what's customary, maybe the seller would pay the owner's policy and the buyer would only pay the lender's policy. But in San Mateo County, the buyer pays owner and lender policy.

Raziel Ungar: Got it. And then in terms of the escrow fee, can you talk a little bit about what that includes?

Cirina Ippolito: Yes.

Raziel Ungar: And as an escrow officer, it's obviously a super tough job and you do a great job with it. Talk about your relationship with the buyer's agent, the listing agent, the buyer and seller, and how that works.

Cirina Ippolito: Okay. So the escrow fee, again, it's on a sliding scale. Most companies cap out at a certain number. I think ours is $1900. And basically, we manage all the documents, all the money, and then communicate with all the parties. So we basically keep together all the communication, all the money, all the documents, and we're there to really service our customers and make sure that they're confident and comfortable in the process because it's very stressful. It can be very emotional and very challenging given the situation. People have deaths in their family and they're selling property or divorce or more complicated transactions that require a lot more care. And then of course for the buyer, I mean, it's the first time possibly that you're purchasing this huge investment. It's scary. With wire fraud, all these things that you hear about are so intimidating and we're just here to facilitate a smooth and easy transaction so that you feel confident with what you're doing because it's a big deal.

Raziel Ungar: Cirina, can you talk a little bit about the workflow from what the client will experience from when the offer's accepted and how you step in then up until closing? Can talk a little bit about that?

Cirina Ippolito: Sure. So basically once the transaction is ratified, the first thing is we get the deposit in. And that's a little nerve-wracking because, with wire fraud on the rise, it's very intimidating and uncomfortable. So we let you know what our wire instructions are. You wire in the funds, and then basically we work with the lender with their documentation. The title report comes, and we make sure that there aren't any unusual liens or encumbrances that may take longer to clear before we close.

Raziel Ungar: This comes a few days into the transaction-

Cirina Ippolito: Yes, yes. Typically, we already have the title report prior to opening. Then again, we just wait for the lender to ask for our fees, they ask for the fire insurance, they ask for other items from the borrower as well as the transaction goes forward. And then ultimately, depending on the timeframe of the contract, about five days prior to close of escrow, the lender will get their documents to us. We have to sign the buyers and the sellers. So we coordinate the signing, coordinate all the documents, do the signing, and then we also coordinate all those documents back to the lender, and then the lender reviews everything again as looking for their title policy, what's that going to include? And then at the bitter end, we get the money from the lender and the money from the buyer and we record at the county recorder's office to transfer title from the seller to the buyer and record the lender's deed of trust that is the loan on the property.

Raziel Ungar: Awesome. Talk a little bit about what's the seller's experience during escrow.

Cirina Ippolito: Okay.

Raziel Ungar: Because a lot of the heavy lifting's on the buy side, but the seller too. What can the seller expect?

Cirina Ippolito: Yes. So on the seller side, it's pretty cut and dry. We want their loan information. If they have any liens that are not a normal mortgage, we would need that information, request those items, get a payoff, demand or statement from those lien holders, and then we prepare their closing statement that would have anything that we're paying commissions or inspections, repairs, staging, et cetera. And ultimately they sign the deed, which is the primary document that transfers title over to the buyer.

Raziel Ungar: And then talk about for the seller, where do they sign their closing papers and what that process is usually like for them, and time too.

Cirina Ippolito: Yeah. So we do sort of a hybrid now. You can either come to our office post... Well, it's not post-COVID. But now that we've opened up a little more, you can either sign in the office or we have mobile notaries that go to the buyer or seller actually because it's a lot more convenient to do it after work or maybe on the weekend. Usually, it takes about 45 minutes to an hour depending on the complexity of the transaction. But other than that, it's a pretty smooth process. We have really qualified people that come to your home if necessary. And then also if you come to the office, of course, you get our expertise and we're happy to do that. We love meeting with buyers and sellers. That's the best part of the job.

Raziel Ungar: And when can the sellers typically expect their funds when the transaction closes? Talk a little bit about that timing.

Cirina Ippolito: When the transaction closes or what we call recording, when we record the deed at the county recorder's office, it's usually the same day. We wire transfer the same day if we're recording in the morning. Once it's recorded, we hit send on the wire and everyone can celebrate.

Raziel Ungar: And how about for buyers? What words of wisdom or, obviously, you've worked with hundreds, probably thousands of buyers over the years, do you have about the process for it to be really smooth for them? Because a lot of people are going through this for the first time.

Cirina Ippolito: Yes.

Raziel Ungar: What have you seen? Because I always thought of what you do. It's like air traffic control. It can be stressful, but because you've done it so much, there's so much you can do to set people's expectations for them to feel good about it.

Cirina Ippolito: Yes. So I think mostly just getting your funds prepared. Some people have saved a portion of their down payment and stocks or their Charles Schwab account that may require an extra step as to just wiring funds. They may need to sell something or move funds around. So to have your funds ready, we usually see that as the biggest challenge when it's right down to the wire is just getting the funds in. Also, just really good communication with your lender. What do they need? There's a lot of stuff that they ask for in terms of what's required to qualify for the loan to ultimately get the loan closed. So just constant contact with the lender. The lenders also have contact with us. So we try to coordinate things as well. And also, most importantly, lean on your realtor, your lender, and your escrow person if you have questions. If you're not sure about something, it's just way better to ask than to try to guess or just wait. Don't wait. If you have a question, just let us know so we can help you through it.

Raziel Ungar: And tell me a little bit about timing for when the buyer signs their closing papers, when they usually do that, where that is, how that works too.

Cirina Ippolito: The best-case scenario would be several days prior to close of escrow. However, we do have situations where the buyer is signing the same morning and we're rushing documents to the county to get them recorded the same day. It just depends on the lender and their timing. And sometimes we get right to the end of the date of the contract ending. So several days before is optimal. That way you have time to get the funds in, we have time to get the documents back to the lender, and the lender has time to review everything and then ultimately send them.

Raziel Ungar: And then talk about who else you would work with behind the scenes or that the client, the buyer, or seller might be working with in addition to someone like you as the escrow officer. Is it typically just you or will there be other folks who are supporting you behind the scenes?

Cirina Ippolito: Oh, definitely. Definitely. We have a sales team. We also have my support staff assistant or associates who are constantly in contact with the clients too. It's just an extension of me. So if they need wire instructions or they have questions about how do I get my documents? Can you email them to me? Can I get copies? Can you help me get this to the lender? We have a support team that's all hands on deck basically.

Raziel Ungar: I'd love to chat for a sec just about wire fraud since that is a huge deal now.

Cirina Ippolito: Yes.

Raziel Ungar: And 10 years ago, this wasn't something that I really heard about and now you hear about people's emails getting hacked, horror stories, someone's sending their money to someplace that they shouldn't be sending it to. What kind of advice or talking about verbally verifying wire instructions do you have for people to prevent-

Cirina Ippolito: Definitely always pick up the phone. What we've found is that-

Raziel Ungar: To call you?

Cirina Ippolito: Yeah. Call the escrow company directly. And what we saw or have been seeing and we're constantly combating is the emails getting hacked. These fraudsters are so sophisticated now. They hack into the emails, they see a for sale sign, and they follow this... I mean, I don't really know how they do it obviously, but they follow the emails, and then usually it's sort of the last minute or in the very beginning, they hack into the email and it's just one letter off from the emails that we're using. And then someone will say, oh, by the way, the wire instructions are here, please use these. We will never email you that there's a change in the wire instructions. So always confirm with your escrow person, and we verbally do that all day long. We're happy to do it.

Raziel Ungar: Can you talk a little bit about can buyers or sellers do everything digitally? Can they sign all their closing papers online with DocuSign? Some things need to be done in person. What do you envision coming down the road? Talk to us a little bit about that and what's now.

Cirina Ippolito: What's now is many documents can be DocuSigned. All of our escrow documents can be DocuSigned with the exception of anything that requires notarization. So for the seller, the grant deed or trust certification for either buyer or seller. There's certain affidavits we require to be notarized. Those have to be signed in person with a notary. But other things can be done DocuSigned. Now some lenders now have hybrid formats where some documents are e-signed, but ultimately there are always a few that need to be signed in person. So right now, California does not have online notarization available, and I don't see that coming anytime really soon. But for the most part, DocuSigning is great if you feel comfortable with that. And also if you're doing that, know that your escrow officer can take the time to be on the phone with you while you're doing it. I've done that where you just go page by page and go through it and it doesn't have to seem any different or any less level of service.

Raziel Ungar: My understanding is that pretty much if you're a buyer or seller, you need to sign with a notary or the mobile notary and that the only exception is if the buyer's paying cash. Then they do not need to have... Is that correct?

Cirina Ippolito: Correct, unless they're purchasing in a trust. And then we would have the trust certification, which requires it to be notarized.

Raziel Ungar: That makes sense.

Raziel Ungar: And can you talk a little bit about do buyers and sellers need to be in the Bay Area during their transaction? People get asked this, they ask me a lot. Can they be overseas?

Cirina Ippolito: Yes.

Raziel Ungar: Talk a little bit about that and what that looks like.

Cirina Ippolito: Yes. So absolutely, very important. If you're going to be out of the country, you have to let the agent and ask escrow officer know because it will take more time. So for example, if you are a seller, you would sign in an embassy in whatever country you're in and then that takes time. And with COVID, now the appointments take longer to get one. Also, we have to factor in how long does it take to get it overnight delivered from another country is not necessarily overnight. It's definitely a bigger timeframe. So it's totally possible. And there's many documents, all the documents really for the seller can be done well in advance. The buyer, it's more difficult if it's not cash when we're dealing with loan documents.

Raziel Ungar: I agree. I mean, we've done some transactions where our clients are overseas and it's certainly a little bit more challenging. And it depends on which country the lead time could be at the embassy. I remember I did one transaction where our sellers were in Australia because they were a participant in the apostille. It was super easy. They were able to get an appointment within a week. I remember we had another client who was in Taiwan, and it kind of took a little bit longer for the lead times. So can you kind of talk about that?

Cirina Ippolito: Right. Certain countries are part of what's called the Hague and in those countries, you can do what's called an apostille, which is basically going to a local attorney that is an apostille and you can use them instead of going to the US Embassy. So again, if you know where you're traveling, you let us know and then we can find out if that's applicable or not. So as long as we have enough time on the front end, we pretty much can do most anything.

Raziel Ungar: What other things do you think are really helpful for buyers and sellers to be aware of in this process?

Cirina Ippolito: I think for the buyer, homeowner's insurance is really crucial. Get that on the front end, which I'm sure you tell your clients anyway. But homeowner's insurance can sometimes be something that is a hiccup at the end. What's common now or was in this market was folks were getting bridge loans and they didn't necessarily tell us. And those documents, once they're recorded, it takes about six weeks for it to actually hit the title report. So if we have a title report and that's happened post the title report, that lien will come up when we're closer to closing or even the day of closing and then we have to scramble to get that information to pay that off. So again, most people are really communicative and understand the importance of knowing that, but some people don't know that.

Raziel Ungar: Can you talk a little bit about the deed? People think, okay, the transaction closes. Should I be getting a document that's handed to me? Not necessarily like a plaque, but something formal. Can you lose that? Does that matter? And then also, part two is people get a lot of documents in the mail after closing. A lot of them are not from government agencies. So just can you kind of share your thoughts?

Cirina Ippolito: Sure. So the grant deed is basically kind of like your pink slip to your car for a better lack of a way of describing, and that gets recorded to the county recorder's office and it gets mailed from the county. So sometimes you don't get it just because of the mail. It's okay if you don't get it. You have a title insurance policy that covers you for your ownership of the property. And that deed is a public record, so it's easy to get a copy of it if you need it, for example, to transfer your kids into a new school district. That's the most common one. You don't have to have the original.

Raziel Ungar: But it's not like you need to get it, put it in a safe. If you lose it, your next-door neighbor takes it. They don't own your house, right?

Cirina Ippolito: No, it's not.

Raziel Ungar: It's a little anti-climactic from that perspective.

Cirina Ippolito: Yeah, it is.

Raziel Ungar: Okay.

Cirina Ippolito: So yeah, it's not necessary to have the original. If you get it, I would definitely keep it and file it where you would put your other important documents, but it's not the end all if you don't have it.

Raziel Ungar: And then how about for people who get a ton of stuff in the mail after closing?

Cirina Ippolito: Yes, yes.

Raziel Ungar: Can you talk about that? Because it's something I chat about monthly with our clients.

Cirina Ippolito: So there's a lot of information that comes from the county. They're going to want to know if you want a homeowner's exemption, you're going to get items from the tax collector, supplemental tax bills. But you'll also get things that appear to be from the tax collector or from an entity that you must have a copy of your deed and for $99, we'll make sure you have that. So there are companies that take advantage of the transaction and know that people may think this is necessary. Again, just call us or call you. We can pretty much weed it out.

Raziel Ungar: Yeah. I mean, a lot of them say not an official government notice at the top, but then people don't read that and it just kind of seems like, oh my God, I need to buy this, but they obviously don't.

Cirina Ippolito: No.

Raziel Ungar: It seems like a good moneymaker for them, but in my view, it shouldn't really be allowed.

Cirina Ippolito: Yes, and it looks very much like items that you get from the tax collector or recorder's office, assessor's office. So again, a quick scan over to us. We can say, yeah, no. This is not worth $129 and not necessary.

Raziel Ungar: Yeah. And Cirina, going back to the title and escrow fees. Even though in San Mateo County the buyer pays the escrow fees and Santa Clara County the seller pays, whoever pays, it's not like they have influence or anything like that. I mean, you're just neutral. Can you comment-

Cirina Ippolito: Yes, we're absolutely neutral. We are a fiduciary. We cannot take sides. We absolutely follow the contract and the instructions that we're given. So for example, if a buyer and a seller don't agree upon something, we can't close escrow until everyone mutually agrees upon it. So yeah, definitely neutral third party. It doesn't depend on who pays the title and escrow premium at all.

Raziel Ungar: Cirina, how would someone choose a title company in the process? Obviously, the realtor might say to the client, here's who I would recommend because they have really good customer service. Talk to me a little bit about that.

Cirina Ippolito: Okay. Yes, definitely our business is much like yours, a referral business. We provide great service and we get repeat customers. But title insurance companies are different. Fidelity who I work for is the largest title insurer in the country. We have the highest level of reserves for claims, which is really important. You want to make sure the title company is going to be around 20 years from now. You're going to own your home for a long time. You want to make sure that your policy and title insurance is truly going to protect you if you have a claim. And the way that we look at that is based on reserves. We also have the highest level of reserves in the industry. Every company posts all of this information. Also, we're a Fortune 200 company. Other title companies have similar rankings with Fortune or Forbes. There's other information out there. So definitely it behooves a consumer to feel confident about who we are, and what our company's all about.

Raziel Ungar: So tell me about some examples. What kind of claims would you see? Hopefully, they're not too often, but I'm sure when you do see them, they're very serious. What kind of stuff comes through?

Cirina Ippolito: So one of our most common claims is mechanics liens, liens on the property that we're not known about. So we always ask in the escrow process of the seller specifically. There's an affidavit that they sign regarding any work that's been done on the property or if they know of any title defects. So those are the things that are the most common.

Raziel Ungar: What would be in mechanics lien specifically for example?

Cirina Ippolito: Okay. So work was done on the property and the contractor or subcontractor was not paid. Those are very common.

Raziel Ungar: And then they say, okay, I wasn't paid. And then they put this lien on the property and then the property cannot be transferred to the new buyer until the lien has been satisfied or removed.

Cirina Ippolito: So if you have a claim, that would be post-closing. So you're the buyer and all of a sudden there's a lien on your property for, say, a roofing company. I didn't hire a roofing company. I don't know what this is about. So your title insurance would cover you for that.

Raziel Ungar: So if we put this into hard numbers. Someone buys the home, they think they're getting a free and clear title, all the participants in the transaction, agent, buyer, seller, everyone thinks it's all been taken care of. And then a month after closing, the buyer learns what?

Cirina Ippolito: That there's a lien. A lien is recorded at the county. They're notified and then they come back to us and then the title company has to do the research and figure it out. I mean, of course, we're going to go look for the proper person to pay-

Raziel Ungar: And does it have to be legitimate? I mean, is it possible the seller might have known that this wasn't paid and then not paid? Or how does that kind of...

Cirina Ippolito: You know what? Most people, we don't usually see that. Sometimes they aren't legitimate liens. Sometimes it's not factual and so that's a whole other process. I would say the other thing that's similarly common is just liens that aren't taken care of, that a release hasn't been done and it's still affecting the title. That happens sometimes also post-closing and it's not necessarily a claim, but it's definitely something that needs to be addressed if there is something from the past from a past owner that's showing up on a title.

Raziel Ungar: Yeah. So for that roofing claim then, who would pay for that? How would that go through the process?

Cirina Ippolito: So as a buyer, you would file a claim with your title insurer, and then our claims department takes it over from there. And then they do the research as who was supposed to pay it and then we get it paid.

Raziel Ungar: Got it. And then is that typically paid by the title insurance firm or does it just kind of depend on the situation?

Cirina Ippolito: It depends. I mean, ultimately the title policy has to protect the buyer so we would do whatever we need to do-

Raziel Ungar: Right. So they'd pay you directly or they go-

Cirina Ippolito: Either we pay and then we get reimbursed or we get the funds from whoever was supposed to pay it.

Raziel Ungar: That makes sense. What are other types of lien? So there's obviously mechanics liens-

Cirina Ippolito: There's tax liens or another one, IRS liens, franchise tax board liens. If the sellers, say, owns their own business, sometimes there's liens that are associated with that. You can own a boat and you don't pay your registration on your boat. That can become a lien, personal lien. So that's another item. We request something called a statement of information sometimes on our transactions because people with common names specifically, Jones or Smith or whatever is a common name-

Raziel Ungar: And what is a statement of-

Cirina Ippolito: Oh. So a statement of information, basically we ask for information, your name, your social security number, where you live, where you work, where you are married, do you have children? And then basically we eliminate liens with someone with a common name because if you're Anthony Jones, there may be something that says Tony Jones or T Jones or A Jones. Well, there could be 20 liens, but none of them are yours. So we can eliminate those liens usually by just getting this basic information. So that's something if that's a question for your buyer or seller. It's not because we want more information or your personal information, it's really to eliminate any potential liens that are of record.

Raziel Ungar: Got it. And can you talk a little bit about supplemental property taxes? What are those? It can be confusing for other buyers.

Cirina Ippolito: Yes, yes.

Raziel Ungar: Property taxes are obviously prorated. As of the data closing, people pay their property taxes twice a year in advance.

Cirina Ippolito: Correct.

Raziel Ungar: So explain what that is.

Cirina Ippolito: So the supplemental tax is based on the new valuation of the property. So depending on what time of year the transaction closes, it depends on which taxes are paid and which aren't paid. So for example, right now the first installment of taxes are now due and payable, and they cover from July 1st to December 31st. So if you close escrow next week, the current tax bill is two installments. One is paid in December, one is paid in April. That's for the fiscal year. So if you close this month in November, your supplemental bill will not come until next year and will be from the date you purchase until the date they reassess the taxes.

Cirina Ippolito: So what happens is you get a separate bill and it's kind of confusing and the value looks different, you're not sure. It's complicated. Again, call your escrow person. Lean on us, we can go over it with you. And sometimes it may take a call to the tax assessor's office too, because sometimes it's complicated. For example, if someone has died and the heirs are selling the property, there may be two supplemental bills and one supplemental bill may not be the buyers. It may be from the date of death of the prior seller. So it can be confusing and sometimes the tax collector doesn't get it right, so definitely lean on us to-

Raziel Ungar: I mean, it's fascinating Cirina. If I were to waive my magic wand, all of this would just be done on the close-to-escrow date.

Cirina Ippolito: Yes.

Raziel Ungar: Practically though, we're dealing with some bureaucracy. It can typically take several months after closing for the supplemental tax bill to come in.

Cirina Ippolito: Sometimes it can take longer.

Raziel Ungar: Interesting, okay.

Cirina Ippolito: Yeah. I mean, the tax collector does want to get it reassessed and get a bill out so that they get paid, obviously. But back to the original question, basically the supplemental is the difference between the old seller's valuation and the new valuation.

Raziel Ungar: And it's obviously prorated in the closing process for-

Cirina Ippolito: The regular taxes are.

Raziel Ungar: The regular taxes are. So the buyer will typically give a credit to the seller for whatever they've prepaid.

Cirina Ippolito: Correct. Or the seller would pay the buyer for taxes that have not yet been paid.

Raziel Ungar: That makes sense.

Cirina Ippolito: So it depends on when you land, and that's also complicated and confusing because it runs on the fiscal year seven one to six 30. So depending on when you're closing, you're either paying backwards or you're paying forwards.

Raziel Ungar: I'm so glad we have wonderful people like you who can calculate all this and figure it out on behalf of the buyers and sellers.

Cirina Ippolito: It's complicated for sure, for sure.

Raziel Ungar: Yeah. Other questions that we haven't discussed that you think we should bring up?

Cirina Ippolito: I don't think so. I think we covered a lot today. Definitely, when you're in the process, don't hesitate to ask the questions. I think a lot of people, I have a really dumb question. Why would this be a dumb question? I mean, it's escrow and real estate. It's like a foreign language. It's totally different terminology. It's not something you're accustomed to hearing. What's a reconveyance, a grant deed, a quick claim deed? There's a lot of different terminology that you're never going to really run across unless you're doing a transaction. And how many transactions do most people do in their lifetime? A handful at most.

Raziel Ungar: Right.

Cirina Ippolito: So definitely don't be afraid because we're here to help. And don't be intimidated by the process. Just embrace it and we're here to help.

Raziel Ungar: Yeah. So thanks for being with us, Cirina, and hope you all enjoyed the presentation.

Raziel Ungar: Thanks for watching my video. If you'd like to stay in the know about what's happening in the real estate market in San Mateo County, or just what's going on in your local neighborhood, please consider subscribing to my channel. If you have ideas for future content that you'd enjoy also, I'd love to hear from you. Thanks.

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