Escrow 101
The escrow agent makes sure that the terms and conditions of the agreement between the two parties are performed in preparation of the sale being finished.
The records the escrow agent may collect include:
- Loan documents
- 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
Closing on the home takes place when all of the procedures of the escrow are complete. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. The house's title is given to you and title insurance begins per the steps of your individual escrow process.
The escrow company gets a payment when the closing is complete. As your real estate professional, I'll inform you of the acceptable way of paying.
The Escrow Holder Will:
- Assemble escrow guidelines
- Perform a title inquiry
- Meet lender's guidelines as outlined in the escrow agreement
- Accept funds from the buyer
- Prorate tax, interest, insurance and other fees according to instructions
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer have been met
- Disburse funds and finalize instructions
The Escrow Holder Will Not:
- Advise you - the escrow holder must maintain a neutral, third-party status
- Offer opinions about tax implications
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The Escrow Holder Will:
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The Escrow Holder Won't:
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Mortgage Escrow Account
A Mortgage Escrow Account is established to pay rolling fees while there is a loan on the house. 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 simple outline of the escrow process. Your specific plan will be unique based on your lender and your escrow agent.
