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What is Escrow?

 Park Property Group can walk you through 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 closing process goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. An everyday way to think of what an escrow company does is to compare it to PayPal for Internet purchases.

The escrow company insures that all terms and conditions of the seller's and buyer's agreement are performed prior to the sale being completed. This includes receiving payments and paperwork, filling out required forms, and seeking out the release documents for any loans or liens that have been cleared with the transaction, assuring you have a free title to your place before the final price is fully paid.

Escrow holders look for the following pieces of paperwork:

  • 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
  • Loan documents

You're ready to close when each step of the done in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. The property's title gets handed over to you and title insurance is issued per the steps of your particular escrow agreement.

The escrow agent gets a payment when the closing is complete. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Prepare escrow instructions
  • Request title inquiry
  • Comply with the bank's requirements as outlined in the escrow agreement
  • Receive 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 instructions of seller and buyer have been met
  • Disburse funds and finish instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow company has to remain an impartial, third-party status
  • Dispense opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Perform a title research
  • Meet the bank's guidelines as written in the escrow agreement
  • Receive payments from the buyer
  • Prorate insurance, tax, interest 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 have been finished
  • Disburse payments and finish instructions
  • Give advice - the escrow holder has to remain an impartial, third-party status
  • Dispense opinions about future tax estimations

Mortgage Escrow Account

A Mortgage Escrow Account is started to pay on-going expenses 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.

This is a quick run-down of the escrow process. Your particular process might be unique based on your bank and your escrow company.

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