The Property is Almost Yours
First, a little about “escrow”. An escrow holder is hired to assure your place closes on time and the closing process goes smoothly. Escrow holders hold money for “safe-keeping” in an exchange between a buyer and seller. PayPal is a good example of an escrow company.
The escrow agent is careful to assure that all terms and conditions of the seller’s and buyer’s contract are reached prior to the sale being completed. This includes securing payments and records, signing required forms, and seeking out the release documents for any loans or liens that have been paid off with the transaction, assuring you have a free title to your house before the purchase price is fully paid.
Escrow companies want to obtain the following legal documents:
- Loan documents
- 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
You’re ready to close when all parts are done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. The home’s title is given to you and title insurance begins per the steps of your individual escrow agreement.
When closing is completely finished, 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:
- Prepare escrow guidelines
- Perform a title search
- Meet the bank’s guidelines as written in the escrow agreement
- Intake funds from the buyer
- Prorate insurance, tax, interest and other payments according to guidelines
- Record deeds and other paperwork as instructed
- Request title insurance policy
- Close escrow when all terms of agreement of seller and buyer are complete
- Disburse monies and finish instructions
The Escrow Holder Won’t:
- Tell you what’s best – the escrow agent must stay at a fair, third-party status
- Offer opinions about the outcome of your taxes
Mortgage Escrow Account
Often, to pay recurring costs while there’s a loan on the house, a Mortgage Escrow Account is created. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.
Once you have the rules of the escrow process down, you can be a more assured buyer.