What Does COE Mean in Real Estate

There’s no shortage of confusing acronyms and specialized jargon in real estate. COE is a term that frequently pops up, especially as you approach the final stages of a property transaction. If you’re hoping to sell a home quickly, the COE can’t come soon. What is this real estate term and why is it important? Let’s unravel the meaning of COE in real estate.

The Meaning of COE in Real Estate

At its core, COE stands for “Close of Escrow.” Similar to what CDA means, it impacts parts of a real estate transaction that happen around the closing. Close of escrow is where everything comes together – the negotiations are complete, the paperwork is signed, and the ownership of the property officially changes hands. There is a ton of anticipation, blood, sweat, and tears that lead up to a home closing.

COE affects all parties involved in a transaction because it is the true finish line. The title and escrow companies finalize their details. Buyers may cover the closing costs of sellers to help things close faster. The homebuyer is now the official owner of the property. Money is transferred – and the seller gets to move on to the next chapter. The close of escrow is a celebratory time for everyone in real estate.

COE Makes Real Estate Transactions Final

The COE is pivotal in real estate transactions. It signifies the legal conclusion of the property sale, where all the agreements previously made between the buyer and seller are finally realized. This moment is crucial as it involves the transfer of funds and property titles.

Buyers and Sellers

For the buyer, it’s the day they officially become the owner of the property. For the seller, it’s about successfully completing the sale and transferring the property to its new owner. There is no going back or ‘backing out of the deal’ when COE passes.

Real Estate Agents

The close of escrow date is also great for real estate agents and brokers involved because COE means the transaction is over and they get paid a commission. They don’t have to continue marketing a property in hopes of selling it. Any marketing ideas, like taking drone footage of the property, are no longer necessary. “That’s a wrap!” Close of escrow is a mix of legal formalities and emotional significance, marking a new chapter for both the buyer and the seller.

What Is COE Date?

One of the trickier aspects of COE is its fluidity in terms of deadlines. Initially, it’s set as a target date to close. However, real estate transactions commonly get delayed because of 1,000,000 different reasons. In the worst-case scenario, a COE date gets completely missed, causing the home to fall out of contract and be listed as BOM. In this scenario, everyone loses.

The COE date is constantly shifting – keeping all parties on their toes.

Common Reasons that the COE date gets pushed back:

  • Mortgage approval delays
  • Unexpected findings during property inspections
  • Last-minute negotiations about terms and conditions

These changes are stressful and (sadly) common. Be flexible and be prepared. Buyers and sellers need to be ready for potential changes. Ideally, try to keep an open line of communication with all agents and lenders involved to reschedule the new COE date.

Challenges Related to COE

Closing escrow on time is not always smooth. Delays happen all the time in real estate transactions – it’s expected in many markets. Even if you have tons of offers from listing your property OBO, delays still happen. What can you do about COE date delays?

PRO TIP: Proactive problem-solving.

The faster you can jump on a potential issue, the less likely it will become a major delaying factor in your home sale. For example, if financing is delayed, try working closely with the lender to expedite the process. If they know about issues ahead of time that could derail a mortgage approval, they can resolve it sooner. The goal is to keep all parties informed as soon as you know information that is relevant to them. COE is a moving target but can happen on the initial date if you’re lucky!

Close of Escrow Real Estate Term

COE in real estate is more than just a date on the calendar. It’s a major milestone that marks the completion of a transaction. Once a transaction closes, it brings various legal, financial, and emotional aspects ‘to a close’. Although COE dates often get pushed back, it doesn’t mean they won’t ever happen.

You can successfully close your escrow – whether buying or selling a house – with the right levels of communication. The most common COE delays are in mortgage and inspection. Be attentive during those processes and communicate all relevant information to the lender and inspector ASAP. Reaching a successful COE is easier when all parties are on the same page during a real estate transaction.