How Escrow Works

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  • 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

Whether it's your first house or your next house, I'll help you through the process. Contact me and I'll make sure you're a empowered buyer.

The Property is Almost Yours

Escrow: When you're closing on your new place, a neutral, third party (known as the escrow holder or the escrow agent) is used to make certain the transaction will close appropriately and in a certain amount of time. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. A simple way to think of what an escrow company does is to compare it to PayPal for Internet purchases.
The escrow company makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are performed prior to the sale being completed. This includes getting monies and records, finishing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring you have a clean title to your property before the final price is fully paid.

The pieces of paperwork the escrow agent may obtain include:

Escrow-2-1.jpg

You're ready to close when all steps are done in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out. You'll then receive the title to the home and the title insurance gets issued as agreed upon in the escrow instructions.

When closing is finished, you'll make a payment to the escrow holder. As your REALTOR, I'll let you know what is an acceptable form of payment.

The Escrow Holder Will:

  • Write escrow instructions

  • Petition title inquiry

  • Comply with the bank's standards as written in the escrow agreement

  • Intake funds from the buyer

  • Prorate interest, insurance, tax 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 are complete

  • Disburse monies and finish instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow holder must stay at a fair, third-party status

  • Dispense opinions about future tax estimations

The Escrow Holder Will:

  • Prepare escrow instructions

  • Perform a title search

  • Comply with the bank's guidelines as noted in the escrow agreement

  • Receive payments from the buyer

  • Prorate tax, interest, insurance and other fees according to guidelines

  • Record deeds and other documents as instructed

  • Obtain title insurance policy

  • Close escrow when all instructions of seller and buyer are met

  • Disburse payments and finish instructions

The Escrow Holder Won't:

  • Tell you what's best - the escrow agent must maintain a neutral, third-party status

  • Dispense opinions about tax implications

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.

This is a quick run-down of the escrow process. Your individual methods might be unique depending on your lender and your escrow holder.

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