| Understanding
Escrow
To finalize the sale of the home a neutral,
third party (the escrow holder, a.k.a. escrow
agent) is engaged to assure the transaction
will close properly and on time. The escrow
holder insures that all terms and conditions
of the seller's and buyer's agreement are met
prior to the sale being finalized, including
receiving funds and documents, completing required
forms, and obtaining the release documents for
any loans or liens that have been paid off with
the transaction, assuring you clear title to
your property before the purchase price is fully
paid.
| The
documentation the escrow holder may
be collecting includes:
- 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
|
Upon
completion of all instructions of the escrow,
closing can take place. All outstanding payments
and fees are collected and paid at this time
(covering expenses such as title insurance,
inspections, real estate commissions). Title
to the property is then transferred to the seller
and appropriate title insurance is issued as
outlined in the escrow instructions.
At
the close of escrow, payment of funds shall
be made in an acceptable form to the escrow.
As your real estate agent, I'll inform you of
the acceptable form.
| The
Escrow Holder
Will: |
|
The
Escrow Holder
Won't: |
- Prepare
escrow instructions
- Request
title search
- Comply
with lender's requirements as specified
in the escrow agreement
- Receive
funds from the buyer
- Prorate
insurance, tax, interest and other
payments according to instructions
- Record
deeds and other documents as instructed
- Request
title insurance policy
- Close
escrow when all instructions of seller
and buyer have been met
- Disburse
funds and finalize instructions
|
|
- Give
advice - the escrow holder must maintain
neutral, third-party status
- Offer
opinions about tax implications
|
Mortgage
Escrow Account
A
Mortgage Escrow Account is established to pay
on-going expenses while there is a loan on the
house. These expenses include property taxes,
home insurance, mortgage insurance, and other
escrow items. Generally, the Escrow Account
is partially funded at closing and the home
buyer makes on-going contributions through their
monthly mortgage payment. |
