Closing the Sale
Escrow
To finalize the sale of a home, a neutral, third party (the escrow agent) is brought into the picture to assure the transaction will close properly and on time. Escrow agents hold money for "safe-keeping" in a deal between a buyer and seller. PayPal is a good example of an escrow company.
The escrow company insures that all terms and conditions of the seller's and buyer's agreement are performed prior to the sale being finished. This includes securing payments and records, filling out required forms, and obtaining the release documents for any loans or liens that were paid off with the transaction, assuring you have a free title to your house before the asking price is fully paid.
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Buying a property for the first time can be intimidating. Let me help you. Contact me. |
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Escrow companies want to acquire the following pieces of paperwork:
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
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You're ready to close when every step is finished in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. You'll then obtain the title to the home and the title insurance gets issued as noted in the escrow instructions.
When closing is done, you'll submit a payment to the escrow agent. You'll know when it's time to submit the form of payment.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Assemble escrow instructions
- Petition title research
- Meet lender's requirements as outlined in the escrow agreement
- Accept payments from the buyer
- Prorate insurance, tax, interest and other payments according to guidelines
- Record deeds and other paperwork as instructed
- Obtain title insurance policy
- Close escrow when all instructions of seller and buyer are complete
- Disburse payments and finish instructions
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- Advise you - the escrow holder stays at an impartial, third-party status
- Offer opinions about tax implications
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Mortgage Escrow Account
Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.
Now you know more about being in escrow. And, you can be a smarter home buyer and future homeowner. |
