Don't let inexperience with the real estate industry scare you from becoming a homeowner. I can help you understand the process. E-mail me at fred@fredthornerealty.com .

Escrow 101

 Fred Thorne Realty LLC can walk you through closing - 9103676396
Let's talk about "escrow". An escrow company is hired to assure your home closes on time and the closing process goes smoothly. A home is said to be in escrow when in the closing process, money is secured by a third party on behalf of two parties when the exchange of money takes place. PayPal is a good way to picture an escrow company.

The escrow company makes sure that the terms and conditions of the agreement between the sellers and the buyers are met prior to the sale being completed.

These are the pieces of paperwork that escrow agents usually look for:

  • 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 property happens when all of the procedures 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). You'll then get the title to the house and the title insurance gets issued as agreed upon in the escrow instructions.

The escrow company receives a payment at the completion of closing. I'll keep you updated on what comes next.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Perform a title research
  • Meet the bank's standards as written in the escrow agreement
  • Accept funds from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse monies and finalize instructions

The Escrow Holder Won't:

  • Advise you - the escrow company stays a neutral, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Petition title search
  • Meet the bank's requirements as written 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 monies and finish instructions
  • Tell you what's best - the escrow agent must maintain a neutral, third-party status
  • Offer opinions about future tax estimations

Mortgage Escrow Account

A Mortgage Escrow Account is used to make payments for on-going fees while there is a loan on the 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.

This is a easy to understand guide about the escrow process. Your individual plan will be slightly different depending on your bank and your escrow company.

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