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The House is Almost Yours
Let's talk about "escrow". An escrow holder is hired to assure your house closes on time and the transaction goes smoothly. Escrow companies hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a good example of an escrow company.
The escrow company makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are met prior to the sale being completed. This includes getting payments and records, 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 clean title to your property before the agreed upon price is fully paid.
Escrow agents compile the following records:
- 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
- Tax statements
Closing on the house happens when all of the procedures of the escrow are finished. All expenses like title insurance, inspections and real estate commissions are paid. You'll then secure the title to the house and the title insurance gets issued as agreed upon in the escrow instructions.
At the close of escrow, payments are submitted in an acceptable form to the escrow. I'll keep you up-to-date on the next steps.
The Escrow Holder Will:
The Escrow Holder Won't:
- Write escrow guidelines
- Perform a title research
- Meet the bank's guidelines as noted in the escrow agreement
- Intake payments 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 terms of agreement of seller and buyer have been finished
- Disburse funds and finalize instructions
- Advise you - the escrow holder stays a neutral, third-party status
- Offer opinions about tax implications
Mortgage Escrow Account
A Mortgage Escrow Account is established to pay rolling 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.
Now you know more about being in escrow. And, you can be a smarter home buyer and future homeowner.