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First-Time Home Buying: How To Close on a Place

 All Star Brokers can walk you through closing - 6262410395
Let's talk about "escrow". An escrow agent is hired to assure your property closes on time and the transaction goes smoothly. A place is said to be in escrow when in the closing process, payment is held by a third party on behalf of a buyer and a seller when the transaction is taking place. PayPal is a simple way to think of an escrow company.

Settling the last details like taking in funds, signing forms, obtaining the documents for loans and liens, and making sure you get a spotless title to the home prior to your purchase gets finalized are all parts of closing in which an escrow company is useful.

These are the legal forms that escrow companies usually look for:

  • 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

Upon finishing of all portions of the escrow, closing can take place. All payments owed and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The house's title goes to you and title insurance is issued per the policies of your individual escrow agreement.

When closing is done, you'll make a payment to the escrow holder. As your REALTOR, I'll let you know what is an acceptable way of paying.

The Escrow Holder Will:

  • Prepare escrow instructions
  • Petition title search
  • Comply with lender's requirements as written in the escrow agreement
  • Receive funds from the buyer
  • Prorate insurance, tax, interest and other payments according to guidelines
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are met
  • Disburse payments and finalize instructions

The Escrow Holder Won't:

  • Give advice - the escrow agent must stay at a fair, third-party status
  • Dispense opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow guidelines
  • Request title search
  • Meet the bank's standards as written in the escrow agreement
  • Intake payments from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been finished
  • Disburse funds and finalize instructions
  • Offer advice - the escrow agent stays at an impartial, third-party status
  • Give insight about the outcome of your taxes

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 being in escrow. And, you can be a better informed home buyer and future homeowner.


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