Prepare Yourself for the Escrow Process

Whether it's your first property or your next house, I'll educate you through the process. Call me at 8286328863.

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

Bret Mundy Real Estate LLC can walk you through closing - 8286328863

Let's talk about "escrow". When you're closing on your new house, a neutral, third party (known as the escrow holder or the escrow agent) is used to make certain the process will close without problems and in a specific time frame. Escrow companies hold money for "safe-keeping" in an exchange between a buyer and seller. A simple way to understand what an escrow company does is to compare it to PayPal for Internet purchases.

The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are completed prior to the sale being finished.

Escrow agents want to obtain the following records:

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

You're ready to close when all parts are done in escrow process. All debts and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The property's title goes to you and title insurance is issued per the steps of your individual escrow agreement.

At the close of escrow, in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

Write escrow instructions
Petition title search
Comply with the bank's standards as noted in the escrow agreement
Receive 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 terms of agreement of seller and buyer have been met
Disburse funds and finalize instructions

The Escrow Holder Won't:

Give advice - the escrow holder must maintain a neutral, third-party status
Give insight about future tax estimations

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow instructions Request title research Meet the bank's guidelines as noted in the escrow agreement Accept 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 terms of agreement of seller and buyer have been finished Disburse monies and finish 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. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

This is a quick run-down of the escrow process. Your specific process might vary depending on your lender and your escrow holder.

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