Things to Expect When You're in Escrow

The process of buying property for the first time can be intimidating. Let me help you. E-mail me at katrina@aerghomes.com .

Steps to Closing on a Home

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Let's talk about "escrow". To complete the sale of a house, a neutral, third party (the escrow company) is brought into the picture to assure the process will close perfectly and on time. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. An easy way to understand what an escrow company does is to compare it to PayPal for Internet purchases.

Tying up any loose ends like taking in funds, finishing forms, getting the documents for loans and liens, and making sure you get a clear title to the home before your purchase gets finalized are all parts of closing in which an escrow holder is useful.

The certificates the escrow agent 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

Closing on the property takes place when the steps of the escrow are done. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. The house's title gets handed over to you and title insurance is issued per the steps of your individual escrow process.

The escrow company gets a payment when the closing is complete. I'll keep you informed on the procedure.

The Escrow Holder Will:

Prepare escrow guidelines
Perform a title inquiry
Meet lender's guidelines as written in the escrow agreement
Accept funds from the buyer
Prorate tax, interest, insurance and other fees according to guidelines
Record deeds and other documents as instructed
Request title insurance policy
Close escrow when all terms of agreement of seller and buyer have been met
Disburse monies and finalize instructions

The Escrow Holder Will Not:

Give advice - the escrow company stays a neutral, third-party status
Dispense opinions about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Prepare escrow instructions Petition title search Comply with the bank's guidelines as specified in the escrow agreement Receive payments from the buyer Prorate interest, insurance, tax and other payments 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 payments and finalize instructions		Tell you what's best - the escrow company stays a neutral, third-party status Give insight about future tax estimations

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. 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 more assured buyer.

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