Whether it's your first property or your next house, We'll advise you through the process.
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Buying Your Next Home: Closing
Escrow: A neutral, third party (known as the escrow holder or the escrow agent) is hired to assure your property closes on time and the transaction goes smoothly.
A house is said to be in escrow when in the closing transaction, money is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place.
An everyday way to understand the concept of what an escrow company does is to think of how you might use PayPal for online purchases.
The escrow agent makes sure that the terms and conditions of the agreement between the two parties are performed in preparation of the sale being finished.
These are the documents that escrow companies usually compile:
- 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
- Tax statements
- Fire and other insurance policies
Upon finishing of all instructions of the escrow, closing can take place.
At this time, all payments and fees for inspections, title insurance and real estate commissions are collected.
You'll then get the title to the house and the title insurance gets dispersed as stated in the escrow instructions.
When closing is finished, you'll pay the fees to the escrow holder.
We'll keep you informed on what comes next.
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow instructions
- Request title inquiry
- Meet lender's standards as outlined in the escrow agreement
- Receive payments from the buyer
- Prorate interest, insurance, tax and other payments according to instructions
- Record deeds and other documents as instructed
- Obtain title insurance policy
- Close escrow when all terms of agreement of seller and buyer are met
- Disburse payments and finalize instructions
- Give advice - the escrow agent stays at an impartial, third-party status
- Give insight about future tax estimations
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.
Once you have the basics of the escrow process down, you can be a informed buyer.