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What is Escrow?

 Park Property Group can walk you through closing -
First, a little about "escrow". To finalize the sale of a property, a neutral, third party (the escrow agent) is employed to assure the transaction will close properly and on 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 think of how you might use PayPal for Internet purchases.

Tying up any loose ends like obtaining funds, signing forms, securing the documents for loans and liens, and assuring you get a clear title to the home before your purchase gets finalized are all parts of closing in which an escrow holder is useful.

Escrow holders want to acquire the following forms:

  • 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 house takes place when all of the procedures of the escrow are done. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. Title to the house is then transferred to you as now current homeowner and related title insurance is issued as noted in the escrow instructions.

The escrow holder gets a payment when the closing is complete. I'll keep you up-to-date on the procedure.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Perform a title search
  • Meet the bank's standards as specified in the escrow agreement
  • Intake payments from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other paperwork 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

The Escrow Holder Will Not:

  • Offer advice - the escrow holder stays at an impartial, third-party status
  • Dispense opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow guidelines
  • Petition title inquiry
  • Comply with lender's guidelines as specified in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse payments and finish instructions
  • Offer advice - the escrow agent stays a neutral, third-party status
  • Dispense opinions about future tax estimations

Mortgage Escrow Account

A Mortgage Escrow Account is started to make payments for recurring 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 easy to understand guide about the escrow process. Your individual methods might vary based on your lender and your escrow holder.

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