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I'll Champion for You Through Closing
Let's talk about "escrow". To complete the sale of a place, a neutral, third party (the escrow holder) is brought into the picture to assure the process will close correctly and on time.
A property is said to be in escrow when in the closing process, payment is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place.
For example, in an online purchase, PayPal is the secure third party that obtains the buyer's funds, and then disburses the funds to the seller.
The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are met prior to the sale being finalized. This includes receiving funds and paperwork, completing required forms, and obtaining the release documents for any loans or liens that were paid off with the transaction, assuring you have a free title to your property before the agreed upon price is fully paid.
These are the documents that escrow companies usually look for:
- 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
- Title insurance policies
Closing on the property takes place when the steps of the escrow are complete.
All expenses like title insurance, inspections and real estate commissions are paid.
You'll then receive the title to the house and the title insurance gets dispersed as outlined in the escrow instructions.
The escrow holder receives a payment at the completion of closing.
I'll keep you updated on what comes next.
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow instructions
- Request title inquiry
- Comply with lender's guidelines as noted in the escrow agreement
- Receive payments from the buyer
- Prorate interest, insurance, tax and other payments according to guidelines
- Record deeds and other paperwork as instructed
- Obtain title insurance policy
- Close escrow when all instructions of seller and buyer have been met
- Disburse funds and finish instructions
- Give advice - the escrow company must maintain a neutral, third-party status
- Offer opinions about future tax estimations
Mortgage Escrow Account
A Mortgage Escrow Account is started to pay recurring expenses while there is a loan on the house.
Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.
Once you're comfortable with the escrow process, you can be a confident buyer.