What is Escrow?
The escrow company makes sure that the terms and conditions of the agreement between the two parties are met in preparation of the sale being completed.
Escrow holders want to obtain the following records:
- 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
You're ready to close when all parts are finished in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out. Title to the house is then given to you as now current homeowner and related title insurance is issued as outlined in the escrow instructions.
When closing is in it's last step, you'll make a payment to the escrow holder. I'll keep you up-to-date on what comes next.
The Escrow Holder Will:
- Prepare escrow instructions
- Perform a title search
- Meet the bank's requirements as noted in the escrow agreement
- Receive payments from the buyer
- Prorate tax, interest, insurance and other fees according to instructions
- Record deeds and other paperwork as instructed
- Obtain title insurance policy
- Close escrow when all terms of agreement of seller and buyer are complete
- Disburse funds and finish instructions
The Escrow Holder Won't:
- Give advice - the escrow holder must maintain a neutral, third-party status
- Dispense opinions about future tax estimations
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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.
Now you know more about how to close on your future home. And, you can be a smarter home buyer and future homeowner.
