Don't let real estate industry jargon keep you from becoming a homeowner. We can help you work your way through the process.
First-Time Home Buying: Closing
Let's talk about "escrow". When you're closing on your new property, an escrow holder is used to make certain the transaction will close without problems and on time.
Escrow companies hold money for "safe-keeping" in an exchange between a buyer and seller.
For example, in a Web purchase, PayPal is the secure third party that holds the buyer's payment, and then sends the funds to the seller.
Tying up any loose ends like receiving funds, finishing forms, securing the documents for loans and liens, and making sure you get a clear title to the home before your purchase gets finalized are all parts of closing in which an escrow agent is useful.
Escrow companies want to obtain the following documents:
- 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
Upon completion of all instructions of the escrow, closing can take place.
At this time, all payments and dues for inspections, title insurance and real estate commissions are collected.
Title to the home is then transferred to you as buyer and correct title insurance is issued as noted in the escrow policy.
At the close of escrow, in an acceptable form to the escrow.
As your REALTORS, we'll inform you of the acceptable way of paying.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow instructions
- Perform a title inquiry
- Meet lender's standards as specified in the escrow agreement
- Intake funds 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 met
- Disburse payments and finish instructions
- Advise you - the escrow company must maintain a neutral, third-party status
- Give insight about tax implications
Mortgage Escrow Account
A Mortgage Escrow Account is started to make payments for on-going fees while there is a loan on the house.
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 more confident home buyer and future homeowner.