The Place is Almost Yours
Let's talk about "escrow". To finish the sale of a house, a neutral, third party (the escrow holder) is employed to assure the transaction will close correctly and on time. A home is said to be in escrow when in the closing transaction, funds is
held by a third party on behalf of a buyer and a seller when the exchange of money takes place. PayPal is a good way to picture an escrow company.
The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's agreement are performed prior to the sale being finalized. This includes securing monies and paperwork, finishing required forms, and seeking out the release documents for any loans or liens that were cleared with the transaction, assuring you have a clear title to your property before the asking price is fully paid.
Escrow companies want to acquire the following records:
- 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
You're ready to close when each step of the complete in escrow process. All outstanding payments and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The home's title is given to you and title insurance begins per the policies of your individual escrow agreement.
At the close of escrow, payments are submitted in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow instructions
- Petition title inquiry
- Comply with lender's requirements 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 documents as instructed
- Obtain title insurance policy
- Close escrow when all terms of agreement of seller and buyer are complete
- Disburse monies and finalize instructions
- Offer advice - the escrow company 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 on-going fees 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.
Now you know more about being in escrow. And, you can be a smarter home buyer and future homeowner.