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Steps to Closing on a Property
First, a little about "escrow". When you're closing on your new house, an escrow agent is used to assure the transaction will close properly and in a certain amount of time.
Escrow agents hold money for "safe-keeping" in a deal between a buyer and seller.
PayPal is a simple way to think of an escrow company.
The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's contract are completed prior to the sale being completed. This includes receiving monies and documents, 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.
Escrow holders collect the following pieces of paperwork:
- 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
- Fire and other insurance policies
- Title insurance policies
You're ready to close when all parts are done in escrow process.
All expenses like title insurance, inspections and real estate commissions are paid.
You'll then receive the title to the home and the title insurance gets dispersed as agreed upon in the escrow instructions.
When closing is done, you'll make a payment to the escrow company.
We'll keep you up-to-date on the procedure.
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow guidelines
- Perform a title research
- Meet the bank's standards as noted in the escrow agreement
- Intake funds from the buyer
- Prorate insurance, tax, interest and other payments according to instructions
- Record deeds and other paperwork as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer have been finished
- Disburse funds and finalize instructions
- Give advice - the escrow agent stays at an impartial, third-party status
- Offer opinions 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.
Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.
Now you know more about how to close on your future home. And, you can be a smarter home buyer and future homeowner.