The process of buying property for the first time can be intimidating. Let us help you.
What is Escrow?
An escrow holder is used to assure your home closes on time and the transaction goes smoothly.
A property is said to be in escrow when in the closing transaction, payment is held by a third party on behalf of a buyer and a seller when the exchange of money takes place.
For example, in a Web purchase, PayPal is the neutral third party that obtains the buyer's payment, and then disburses the payment to the seller.
Tying up any loose ends like receiving funds, finishing forms, obtaining the documents for loans and liens, and assuring you get a clean title to the house prior to your purchase gets finalized are all parts of closing in which an escrow agent is useful.
Escrow holders want to acquire the following documents:
- Requests for payment for various services to be paid out of escrow funds
- Loan documents
- Tax statements
- Fire and other insurance policies
- Title insurance policies
- Terms of sale and any seller-assisted financing
Closing on the property happens when the steps of the escrow are complete.
All expenses like title insurance, inspections and real estate commissions are paid.
Title to the property is then transferred to you as now current homeowner and related title insurance is issued as outlined in the escrow instructions.
The escrow holder receives a payment when the closing is complete.
As your agents, we'll let you know what is an acceptable way of paying.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow instructions
- Request title search
- Meet the bank's standards as noted 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
- Request title insurance policy
- Close escrow when all instructions of seller and buyer have been finished
- Disburse funds and finish instructions
- Advise you - the escrow holder stays a neutral, third-party status
- Offer opinions about future tax estimations
Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house.
Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.
Now you know more about how to close on your future home. And, you can be a more confident home buyer and future homeowner.