Whether it's your first property or your next place, I'll walk you through the process.
and I'll help you become a smart buyer.
First-Time Home Buying: Closing
Escrow: To close the sale of a property, a neutral, third party (the escrow holder) is brought into the picture to assure the transaction will close properly and on time.
When money is held by a third party in a transaction between a buyer and a seller, it's in escrow.
An everyday way to think of what an escrow company does is to think of how you might use PayPal for online purchases.
The escrow company makes sure that the terms and conditions of the agreement between the two parties are performed in preparation of the sale being finished.
Escrow agents compile the following records:
- 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
- Terms of sale and any seller-assisted financing
You're ready to close when every step is finished in escrow process.
All outstanding payments and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions).
The home's title goes to you and title insurance is issued per the policies of your individual escrow process.
When closing is finished, you'll submit a payment to the escrow holder.
As your real estate agent, I'll let you know what is an acceptable form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow instructions
- Perform a title research
- Comply with lender's standards as outlined in the escrow agreement
- Intake funds from the buyer
- Prorate tax, interest, insurance and other fees according to guidelines
- Record deeds and other legal documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer have been finished
- Disburse monies and finalize instructions
- Give advice - the escrow agent must maintain a neutral, third-party status
- Dispense opinions about future tax estimations
Mortgage Escrow Account
Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created.
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.
Once you're comfortable with the escrow process, you can be a more assured buyer.