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Escrow: An escrow holder is brought on to assure your property closes on time and the closing process goes smoothly. Escrow holders hold money for "safe-keeping" in a deal between a buyer and seller. An easy way to understand what an escrow company does is to think of how you might use PayPal for Internet purchases.

Clearing the final hurdles like taking in funds, signing forms, getting the documents for loans and liens, and making sure you get a clean title to the house before your purchase gets finalized are all part of the job of the escrow agent.

The certificates the escrow holder may secure 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

You're ready to close when all parts are complete in escrow process. All outstanding payments and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the home is then given to you as new homeowner and appropriate title insurance is issued as noted in the escrow policy.

When closing is finished, you'll pay the fees to the escrow company. I'll keep you informed on the next steps.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Petition title research
  • 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 instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse funds and finalize instructions

The Escrow Holder Won't:

  • Tell you what's best - the escrow company has to remain an impartial, third-party status
  • Give insight about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Perform a title search
  • Comply with the bank's standards as specified in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been met
  • Disburse monies and finalize instructions
  • Tell you what's best - the escrow agent stays at an impartial, 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. 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 process may vary based on your lender and your escrow company.

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