Whether it's your first house or your next house, We'll educate you through the process.
Completing the Transaction
Let's talk about "escrow". When you're closing on your new property, a neutral, third party (known as the escrow holder or the escrow agent) is used to insure the process will close correctly and in a certain amount of time.
When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow.
For example, in an Internet purchase, PayPal is the neutral third party that obtains the buyer's payment, and then sends the money to the seller.
The escrow holder makes sure that the terms and conditions of the agreement between the two parties are performed in preparation of the sale being finalized.
Escrow holders want to acquire the following forms:
- 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
Closing on the home takes place when the steps of the escrow are complete.
All debts and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions).
You'll then obtain the title to the property and the title insurance gets issued as stated in the escrow instructions.
At the close of escrow, fees are paid in an acceptable form to the escrow.
As your REALTORS, we'll inform you of the acceptable form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow guidelines
- Petition title research
- Meet lender's guidelines as specified in the escrow agreement
- Accept funds from the buyer
- Prorate interest, insurance, tax and other payments according to guidelines
- Record deeds and other documents as instructed
- Obtain title insurance policy
- Close escrow when all terms of agreement of seller and buyer have been finished
- Disburse payments and finish instructions
- Give advice - the escrow holder must stay at a fair, third-party status
- Dispense opinions about the outcome of your taxes
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.
This is a easy to understand guide about the escrow process. Your specific methods may be unique depending on your bank and your escrow agent.