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The House is Almost Yours

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Let's talk about "escrow". To finish the sale of a home, a neutral, third party (the escrow agent) is employed to assure the transaction will close properly and on time. A house is said to be in escrow when in the closing process, payment is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. For example, in an online auction, PayPal is the reliable third party that holds the buyer's cash, and then disburses the payment to the seller.

The escrow company makes sure that all terms and conditions of the seller's and buyer's agreement are reached prior to the sale being finalized. This includes securing payments and paperwork, signing required forms, and seeking out the release documents for any loans or liens that have been cleared with the transaction, assuring you have a free title to your house before the negotiated price is fully paid.

The pieces of paperwork the escrow holder may collect 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

You're ready to close when every step is finished in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. The house's title gets handed over to you and title insurance begins per the policies of your particular escrow agreement.

The escrow company gets a payment when the closing is complete. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Petition title search
  • Comply with the bank's standards as noted in the escrow agreement
  • Accept funds from the buyer
  • Prorate insurance, tax, interest and other payments according to guidelines
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are complete
  • Disburse monies and finish instructions

The Escrow Holder Will Not:

  • Advise you - the escrow agent stays a neutral, third-party status
  • Give insight about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Request title research
  • Meet lender's guidelines as specified in the escrow agreement
  • Accept funds from the buyer
  • Prorate interest, insurance, tax and other payments 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 are met
  • Disburse funds and finish instructions
  • Give advice - the escrow agent must stay at a fair, third-party status
  • Give insight about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is used to pay rolling fees 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 familiar with the escrow process, you can be a confident buyer.

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