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I'll Champion for You Through Closing

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Let's talk about "escrow". To close the sale of a home, a neutral, third party (the escrow agent) is brought into the picture to assure the process will close perfectly and on time. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. A simple way to understand what an escrow company does is to compare it to PayPal for Internet purchases.

The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are met in preparation of the sale being finalized.

Escrow companies compile the following documents:

  • 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
  • Title insurance policies

Closing on the home happens when the steps of the escrow are complete. All outstanding payments and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The property's title gets handed over to you and title insurance begins per the steps of your individual escrow process.

The escrow holder receives a payment at the completion of closing. I'll keep you up-to-date on the procedure.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Perform a title inquiry
  • Meet the bank's guidelines as specified in the escrow agreement
  • Accept funds from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been met
  • Disburse payments and finalize instructions

The Escrow Holder Won't:

  • Give advice - the escrow company must stay at a fair, third-party status
  • Offer opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow guidelines
  • Request title search
  • Meet lender's requirements as noted in the escrow agreement
  • Intake funds from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been finished
  • Disburse payments and finalize instructions
  • Tell you what's best - the escrow holder stays 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. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

This is a quick run-down of the escrow process. Your individual process could be unique based on your bank and your escrow holder.

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