To finalize the sale of a house, a neutral, third party (the escrow company) is brought into the picture to assure the process will close correctly and on time. Escrow agents hold money for “safe-keeping” in an exchange between a buyer and seller. An easy way to understand what an escrow company does is to think of how you might use PayPal for Internet purchases.

 

The escrow company makes sure that the terms and conditions of the agreement between the two parties are completed prior to the sale being completed.

 

These are the records that escrow companies usually compile:

 

  • 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
  • Tax statements
  • Fire and other insurance policies
You’re ready to close when every step is complete in escrow process. All outstanding payments and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). You’ll then obtain the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.

 

At the close of escrow, fees are paid in an acceptable form to the escrow. We will keep you informed on what comes next.

 

The Escrow Holder Will:
The Escrow Holder Won’t:
  • Assemble escrow instructions
  • Request title search
  • Meet the bank’s guidelines as outlined in the escrow agreement
  • Accept payments from the buyer
  • Prorate insurance, tax, interest and other payments according to guidelines
  • Record deeds and other documents 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 holder has to remain an impartial, third-party status
  • Dispense opinions about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is used to make payments for rolling expenses while there is a loan on the house. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

 

Once you have the rules of the escrow process down, you can be a better buyer.