Understanding how Escrow works – Hanley Agency, Inc., Pittsburgh, PA

Whether it's your first house or your next home, I'll advise you through the process. Call me at 412-422-7900.

What To Expect When You're Closing in Pittsburgh, Pennsylvania

Hanley Agency, Inc. can walk you through closing - 412-422-7900

Escrow: To finalize the sale of a house, a neutral, third party (the escrow company) is brought into the picture to assure the transaction 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. For example, in a Web purchase, PayPal is the neutral third party that obtains the buyer's funds, and then hands over the funds to the seller.

Tying up any loose ends like receiving funds, completing forms, securing the documents for loans and liens, and making sure you get a clear title to the house before your purchase gets finalized are all parts of closing in which an escrow holder is useful.

Escrow agents collect the following documents:

Tax statements
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

Upon finishing of all portions of the escrow, closing can take place. All debts and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the home is then transferred to you as buyer and related title insurance is issued as outlined in the escrow policy.

At the close of escrow, fees are paid in an acceptable form to the escrow. As your real estate agent, I'll let you know what is an acceptable way of paying.

The Escrow Holder Will:

Write escrow guidelines
Request title search
Comply with the bank's requirements as written in the escrow agreement
Accept funds from the buyer
Prorate insurance, tax, interest and other payments according to guidelines
Record deeds and other documents as instructed
Request title insurance policy
Close escrow when all instructions of seller and buyer are met
Disburse funds and finalize instructions

The Escrow Holder Will Not:

Advise you - the escrow holder stays at an impartial, third-party status
Offer opinions about tax implications

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow guidelines Perform a title research Meet lender's requirements as noted in the escrow agreement Accept payments from the buyer Prorate tax, interest, insurance and other fees according to instructions Record deeds and other documents as instructed Request title insurance policy Close escrow when all terms of agreement of seller and buyer are met Disburse payments and finish instructions		Advise you - the escrow holder must maintain a neutral, third-party status Offer opinions about the outcome of your taxes

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.

Once you're comfortable with the escrow process, you can be a informed buyer.

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