Whether it's your first home or your next house, We'll advise you through the process.
First-Time Home Buying: Closing
First, a little about "escrow". To close the sale of a property, a neutral, third party (the escrow company) is brought into the picture to assure the process will close properly and on time.
A house is said to be in escrow when in the closing process, funds is held by a third party on behalf of two parties when the exchange of money takes place.
A simple way to understand what an escrow company does is to think of how you might use PayPal for online purchases.
The escrow holder makes sure that the terms and conditions of the agreement between the two parties are met prior to the sale being completed.
Escrow holders look for the following legal documents:
- 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
Upon completion of all instructions of the escrow, closing can take place.
All expenses like title insurance, inspections and real estate commissions are paid.
The home's title goes to you and title insurance begins per the policies of your particular escrow process.
When closing is finished, you'll submit a payment to the escrow agent.
We'll keep you informed on the next steps.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow guidelines
- Petition title search
- Meet lender's guidelines as noted in the escrow agreement
- Accept payments from the buyer
- Prorate interest, insurance, tax and other payments according to guidelines
- Record deeds and other paperwork as instructed
- Request title insurance policy
- Close escrow when all terms of agreement of seller and buyer are met
- Disburse payments and finalize instructions
- Offer advice - the escrow company stays a neutral, third-party status
- Dispense opinions about the outcome of your taxes
Mortgage Escrow Account
A Mortgage Escrow Account is started to make payments for on-going fees while there is a loan on the house.
Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.
This is a quick run-down of the escrow process. Your particular plan could vary based on your lender and your escrow company.