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I'll Champion for You Through Closing
First, a little about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is used to assure your house closes on time and the money exchanging part of closing goes smoothly. Escrow holders hold money for "safe-keeping" in transactions between a buyer and seller. An easy way to understand the concept of what an escrow company does is to compare it to PayPal for online purchases.
The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are performed in preparation of the sale being completed.
These are the legal forms that escrow holders usually look to collect:
- Terms of sale and any seller-assisted financing
- 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
Closing on the home happens when the steps of the escrow are finished. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. You'll then secure the title to the home and the title insurance gets dispersed as outlined in the escrow instructions.
At the close of escrow, payments of funds are made in an acceptable form to the escrow. As your REALTOR, I'll let you know what is an acceptable way of paying.
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow guidelines
- Perform a title research
- Comply with the bank's guidelines as outlined in the escrow agreement
- Accept 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 terms of agreement of seller and buyer have been finished
- Disburse payments and finish instructions
- Offer advice - the escrow holder stays a neutral, third-party status
- Dispense opinions about future tax estimations
Mortgage Escrow Account
A Mortgage Escrow Account is established to make payments for on-going expenses 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.
This is a quick run-down of the escrow process. Your individual plan might be slightly different depending on your bank and your escrow holder.