Escrow 101

Escrow
When you're closing on your new house, an escrow holder is used to ensure the transaction will close appropriately and in a specific time frame. When money 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.

Tying up any loose ends like taking in funds, signing forms, getting the documents for loans and liens, and making sure you a clean title to the property in preparation of your purchase gets finalized are all parts of closing in which an escrow holder is useful.

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Escrow agents compile the following 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

Closing on the property takes place when the steps of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. You'll then secure the title to the property and the title insurance gets issued as agreed upon in the escrow instructions.

At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. I'll keep you coach you on the through the procedure.

The Escrow Holder Will:		The Escrow Holder Won't:
Write escrow guidelines Petition title search Meet lender's requirements as written in the escrow agreement Intake funds from the buyer Prorate tax, interest, insurance and other fees according to guidelines 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 finish instructions		Tell you what's best - the escrow holder stays a neutral, third-party status Give insight about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is started to pay recurring expenses while there is a loan on the house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Once you're comfortable with the escrow process, you can be a confident buyer.