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Completing the Transaction
Escrow: An escrow agent is hired to assure your home closes on time and the money exchanging part of closing goes smoothly.
Escrow agents hold money for "safe-keeping" in transactions between a buyer and seller.
An easy way to understand what an escrow company does is to compare it to PayPal for Internet purchases.
Tying up any loose ends like obtaining funds, finishing forms, getting the documents for loans and liens, and assuring you get a clear title to the home in preparation of your purchase gets finalized are all part of the job of the escrow company.
Escrow holders collect the following records:
- 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 instructions of the escrow, closing can take place.
At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out.
You'll then get the title to the home and the title insurance gets dispersed as noted in the escrow instructions.
The escrow company gets a payment when the closing is complete.
As your real estate agents, we'll let you know what is an acceptable way of paying.
The Escrow Holder Will:
The Escrow Holder Won't:
- Write escrow guidelines
- Petition title inquiry
- Comply with the bank's guidelines as specified in the escrow agreement
- Intake payments from the buyer
- Prorate tax, interest, insurance and other fees according to instructions
- 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 payments and finish instructions
- Offer advice - the escrow company has to remain an impartial, third-party status
- Dispense 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.
Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.
Once you have the basics of the escrow process down, you can be a confident buyer.