Whether it's your first home or your next place, I'll walk you through the process. Call me at (707) 869-9067.

Escrow 101

 RE/MAX  Full Spectrum - Roxanne Mercer can walk you through closing - (707) 869-9067
Let's talk about "escrow". To finalize the sale of a home, a neutral, third party (the escrow holder) is employed to assure the process will close correctly and on time. Escrow agents hold money for "safe-keeping" in transactions between a buyer and seller. An easy way to think of what an escrow company does is to compare it to PayPal for Internet purchases.

The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are met in preparation of the sale being finalized.

Escrow agents want to acquire the following legal documents:

  • 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

You're ready to close when each step of the done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. The property's title goes to you and title insurance is issued per the steps of your individual escrow agreement.

At the close of escrow, payments are submitted in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Perform a title inquiry
  • Comply with the bank's guidelines as specified in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse funds and finish instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow agent must stay at a fair, third-party status
  • Dispense opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow guidelines
  • Request title inquiry
  • Meet the bank's requirements as written in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse payments and finalize instructions
  • Advise you - the escrow agent stays at an impartial, third-party status
  • Dispense opinions about tax implications

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

Once you have the ABCs of the escrow process down, you can be a better buyer.

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