Whether it's your first house or your next place, I'll educate you through the process. Contact me
What is Escrow?
Escrow: A neutral, third party (known as the escrow holder or the escrow agent) is used to assure your property closes on time and the process goes smoothly. 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 (in this case, a buyer and a seller) when the exchange of money takes place. PayPal is a good way to picture an escrow company.
The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are reached prior to the sale being finished.
The records the escrow agent may collect include:
- 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. You'll then receive the title to the home and the title insurance gets issued as stated in the escrow instructions.
At the close of escrow, payments of funds are made in an acceptable form to the escrow. I'll keep you updated on the next steps.
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow instructions
- Perform a title research
- Comply with lender's standards as outlined in the escrow agreement
- Accept funds from the buyer
- Prorate insurance, tax, interest 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 finished
- Disburse monies and finish instructions
- Give advice - the escrow agent stays a neutral, third-party status
- Offer opinions about the outcome of your taxes
Mortgage Escrow Account
A Mortgage Escrow Account is used to pay on-going fees 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.
This is a quick run-down of the escrow process. Your specific methods might vary based on your bank and your escrow agent.