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First-Time Home Buying: How To Close on a House

 Roxanne Mercer Real Estate can walk you through closing - (707) 318-8829
Escrow: To complete the sale of a house, a neutral, third party (the escrow agent) is employed to assure the transaction will close correctly and on time. A property is said to be in escrow when in the closing transaction, payment is held by a third party on behalf of two parties when the exchange of money takes place. A simple way to think of what an escrow company does is to compare it to PayPal for Internet purchases.

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

The records the escrow agent may collect include:

  • Loan 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

You're ready to close when all parts are complete in escrow process. All outstanding payments and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The house's title goes to you and title insurance is issued per the steps of your particular escrow process.

The escrow agent receives a payment at the completion of closing. As your real estate agent, I'll inform you of the acceptable way of paying.

The Escrow Holder Will:

  • Write escrow instructions
  • Request title research
  • Comply with the bank's guidelines as outlined in the escrow agreement
  • Receive payments from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other documents as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been finished
  • Disburse funds and finish instructions

The Escrow Holder Will Not:

  • Advise you - the escrow holder stays a neutral, third-party status
  • Give insight about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow guidelines
  • Petition title research
  • Meet the bank's guidelines as noted in the escrow agreement
  • Intake payments from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other paperwork 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 stays at an impartial, third-party status
  • Dispense opinions about future tax estimations

Mortgage Escrow Account

Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.

Once you're familiar with the escrow process, you can be a better buyer.

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