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Completing the Transaction
Let's talk about "escrow". An escrow company is used to assure your place closes on time and the closing process goes smoothly. Escrow agents hold money for "safe-keeping" in a deal between a buyer and seller. PayPal is a good way to picture an escrow company.
Settling the last details like receiving funds, signing forms, obtaining the documents for loans and liens, and assuring you get a clean title to the property in preparation of your purchase gets finalized are all parts of closing in which an escrow holder is useful.
Escrow holders want to obtain the following forms:
- 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
Upon completion of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. The property's title gets handed over to you and title insurance is issued per the steps of your particular escrow process.
When closing is completely finished, you'll pay the fees to the escrow holder. As your real estate agents, we'll inform you of the acceptable way of paying.
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow instructions
- Request title research
- Meet the bank's standards as specified in the escrow agreement
- Intake payments from the buyer
- Prorate interest, insurance, tax and other payments according to instructions
- Record deeds and other paperwork as instructed
- Obtain title insurance policy
- Close escrow when all terms of agreement of seller and buyer are complete
- Disburse payments and finalize instructions
- Give advice - the escrow company must maintain a neutral, third-party status
- Dispense opinions about tax implications
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.
Now you know more about how to close on your future home. And, you can be a more confident home buyer and future homeowner.