Buying property for the first time can be intimidating. Let us help you.
and we'll help you become a smart buyer.
First-Time Home Buying: Closing
First, a little about "escrow". When you're closing on your new property, an escrow company is used to insure the transaction will close correctly and in a timely manner.
A home is said to be in escrow when in the closing transaction, funds is secured by a third party on behalf of two parties when the exchange of money takes place.
A simple way to think of what an escrow company does is to compare it to PayPal for Internet purchases.
The escrow agent insures that all terms and conditions of the seller's and buyer's negotiated agreement are met prior to the sale being finished. This includes receiving payments and certificates, finishing required forms, and getting the release documents for any loans or liens that were paid off with the transaction, assuring you have a clean title to your place before the negotiated price is fully paid.
These are the records that escrow holders usually look for:
- 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
Upon completion of all portions of the escrow, closing can take place.
All expenses like title insurance, inspections and real estate commissions are paid.
Title to the property is then given to you as new owner and related title insurance is issued as outlined in the escrow policy.
At the close of escrow, payments are submitted in an acceptable form to the escrow.
We'll keep you informed on what comes next.
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow instructions
- Request title search
- Comply with lender's guidelines as noted in the escrow agreement
- Intake funds from the buyer
- Prorate interest, insurance, tax and other payments according to guidelines
- Record deeds and other legal documents as instructed
- Request title insurance policy
- Close escrow when all terms of agreement of seller and buyer have been met
- Disburse funds and finalize instructions
- Offer advice - the escrow holder has to remain an impartial, third-party status
- Offer opinions about the outcome of your taxes
Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house.
Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.
Now you know more about being in escrow. And, you can be a better informed home buyer and future homeowner.