Completing the Transaction
Escrow: When you're closing on your new property, an escrow company is used to make certain the process will close appropriately and on time.
Escrow agents hold money for "safe-keeping" in an exchange between a buyer and seller.
PayPal is a good way to picture an escrow company.
The escrow company makes sure that the terms and conditions of the agreement between the sellers and the buyers are met in preparation of the sale being finalized.
These are the records that escrow companies usually look to collect:
- 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 house happens when all of the procedures of the escrow are complete.
All expenses like title insurance, inspections and real estate commissions are paid.
Title to the house is then transferred to you as buyer and appropriate title insurance is issued as outlined in the escrow instructions.
When closing is in it's last step, you'll submit a payment to the escrow agent.
You'll know when it's time to submit the form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow guidelines
- Request title research
- Meet the bank's requirements as noted in the escrow agreement
- Accept funds from the buyer
- Prorate tax, interest, insurance and other fees 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 have been met
- Disburse monies and finalize instructions
- Give advice - the escrow agent has to remain an impartial, third-party status
- Offer opinions about tax implications
Mortgage Escrow Account
A Mortgage Escrow Account is established to pay on-going fees while there is a loan on the house.
Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.
Once you have the basics of the escrow process down, you can be a informed buyer.