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When you're closing on your new home, an escrow holder is used to assure the process will close without problems and in a certain amount of time. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a simple way to think of an escrow company.
The escrow company is careful to assure that all terms and conditions of the seller's and buyer's contract are reached prior to the sale being finalized. This includes getting monies and records, filling out required forms, and getting the release documents for any loans or liens that were cleared with the transaction, assuring you have a clean title to your place before the purchase price is fully paid.
The documents the escrow company may secure include:
• 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
• Loan documents
• Tax statements
Closing on the property takes place when all of the procedures of the escrow are done. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. Title to the house is then transferred to you as now current homeowner and appropriate title insurance is issued as outlined in the escrow instructions.
The escrow company gets a payment when the closing is complete. I'll keep you up-to-date on what comes next.
HOW ESCROW WORKS
The Escrow Holder Will:
• Write escrow instructions
• Petition title research
• Meet the bank's guidelines as specified in the escrow agreement
• Accept payments from the buyer
• Prorate insurance, tax, interest and other payments according to instructions
• Record deeds and other documents as instructed
• Obtain title insurance policy
• Close escrow when all terms of agreement of seller and buyer have been finished
• Disburse payments and finish instructions
The Escrow Holder Won't:
• Tell you what's best - the escrow holder has to remain an impartial, third-party status
• Give insight about future tax estimations
Mortgage Escrow Account
Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.
Now you know more about how to close on your future home. And, you can be a better informed home buyer and future homeowner.
Ken Baittinger: 3732 N. Croatan Hwy Kitty Hawk, NC 27949-9208
Phone: 252-305-5255 Fax: 252-255-1226 E-mail: firstname.lastname@example.org
Copyright © 2017 KEN BAITTINGER, REALTOR
All rate, payment, and area information are estimates and approximations only.