Purchasing a house for the first time can be intimidating. Let us help you. Contact me
First-Time Home Buying: Closing
First, a little about "escrow". To finish the sale of a home, a neutral, third party (the escrow holder) is employed to assure the transaction will close properly and on time. A home 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 exchange of money takes place. PayPal is a good example of an escrow company.
Clearing the final hurdles like obtaining funds, finishing forms, securing the documents for loans and liens, and making sure you get a spotless title to the house before your purchase gets finalized are all parts of closing in which an escrow holder is useful.
The records the escrow holder may secure include:
- 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
- Loan documents
Upon finishing of all instructions of the escrow, closing can take place. All debts and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The property's title is given to you and title insurance is issued per the steps of your particular escrow process.
When closing is done, you'll submit a payment to the escrow holder. As your agents, we'll inform you of the acceptable way of paying.
The Escrow Holder Will:
The Escrow Holder Won't:
- Write escrow guidelines
- Petition title search
- Meet the bank's guidelines as outlined in the escrow agreement
- Intake payments from the buyer
- Prorate insurance, tax, interest and other payments according to guidelines
- Record deeds and other paperwork as instructed
- Obtain title insurance policy
- Close escrow when all instructions of seller and buyer have been met
- Disburse monies and finalize instructions
- Offer advice - the escrow holder must maintain a neutral, third-party status
- Offer opinions about future tax estimations
Mortgage Escrow Account
A Mortgage Escrow Account is established to pay on-going 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 have the basics of the escrow process down, you can be a more assured buyer.