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The Place is Almost Yours
Escrow: To finish the sale of a home, a neutral, third party (the escrow holder) is brought into the picture to assure the transaction will close correctly and on time.
Escrow agents hold money for "safe-keeping" in transactions between a buyer and seller.
An everyday way to understand the concept of what an escrow company does is to think of the use of PayPal for online purchases.
The escrow company is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are completed prior to the sale being finalized. This includes receiving funds and paperwork, signing required forms, and seeking out the release documents for any loans or liens that were paid with the transaction, assuring you have a clean title to your property before the agreed upon price is fully paid.
The records the escrow company may collect include:
- 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
- Terms of sale and any seller-assisted financing
You're ready to close when each step of the complete in escrow process.
At this time, all payments and fees for inspections, title insurance and real estate commissions are collected.
Title to the home is then given to you as now current homeowner and related title insurance is issued as noted in the escrow policy.
At the close of escrow, payments are submitted in an acceptable form to the escrow.
We'll keep you updated on what comes next.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Assemble escrow guidelines
- Perform a title research
- Meet the bank's guidelines as noted 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 instructions of seller and buyer have been finished
- Disburse payments and finish instructions
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- Tell you what's best - the escrow holder stays at an impartial, third-party status
- Offer opinions about future tax estimations
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Mortgage Escrow Account
Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created.
Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.
This is a easy to understand guide about the escrow process. Your individual plan will be unique depending on your bank and your escrow holder.