Buying a house for the first time can be confusing. Let us help you.
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The House is Almost Yours
First, a little about "escrow". An escrow holder is hired to assure your property closes on time and the transaction goes smoothly.
A house is said to be in escrow when in the closing transaction, funds is secured by a third party on behalf of two parties when the transaction is taking place.
For example, in an Internet auction, PayPal is the reliable third party that obtains the buyer's cash, and then disburses the funds to the seller.
Settling the last details like receiving funds, finishing forms, getting the documents for loans and liens, and making sure you get a clean title to the home prior to your purchase gets finalized are all parts of closing in which an escrow company is useful.
The documents the escrow company may secure include:
- 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
- Fire and other insurance policies
You're ready to close when each step of the finished in escrow process.
All expenses like title insurance, inspections and real estate commissions are paid.
You'll then receive the title to the home and the title insurance gets issued as noted in the escrow instructions.
The escrow agent receives a payment when the closing is complete.
You'll know when it's time to submit the form of payment.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Prepare escrow guidelines
- Request title search
- Meet the bank's guidelines as written in the escrow agreement
- Intake funds from the buyer
- Prorate interest, insurance, tax and other payments according to instructions
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all terms of agreement of seller and buyer are met
- Disburse monies and finalize instructions
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- Give advice - the escrow agent must maintain a neutral, third-party status
- Give insight about the outcome of your taxes
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Mortgage Escrow Account
A Mortgage Escrow Account is started to pay rolling expenses while there is a loan on the 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 have the ABCs of the escrow process down, you can be a better buyer.