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I'll Champion for You Through Closing
First, a little about "escrow". To finish the sale of a place, a neutral, third party (the escrow holder) is brought into the picture to assure the process will close properly and on time.
A place is said to be in escrow when in the closing transaction, funds is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place.
PayPal is a good way to picture an escrow company.
Tying up any loose ends like receiving funds, signing forms, getting the documents for loans and liens, and making sure you get a clear title to the house in preparation of your purchase gets finalized are all parts of closing in which an escrow agent is useful.
The records the escrow holder may collect include:
- 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
- Terms of sale and any seller-assisted financing
You're ready to close when every step is finished in escrow process.
All outstanding payments and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions).
You'll then get the title to the property and the title insurance gets dispersed as noted in the escrow instructions.
At the close of escrow, payment of funds shall be made 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:
- Write escrow instructions
- Perform a title inquiry
- Comply with the bank's guidelines as written in the escrow agreement
- Receive funds from the buyer
- Prorate tax, interest, insurance and other fees according to guidelines
- Record deeds and other legal documents as instructed
- Obtain title insurance policy
- Close escrow when all instructions of seller and buyer have been finished
- Disburse payments and finalize instructions
- Offer advice - the escrow agent stays at an impartial, third-party status
- Give insight about future tax estimations
Mortgage Escrow Account
Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created.
Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.
Now you know more about how to close on your future home. And, you can be a smarter home buyer and future homeowner.