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First-Time Home Buying: Closing

 Re/Max Results can walk you through closing - 264-252-9005
Let's talk about "escrow". An escrow agent is used to assure your place closes on time and the transaction goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an Internet auction, PayPal is the reliable third party that obtains the buyer's payment, and then hands over the payment to the seller.

The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's agreement are completed prior to the sale being finished. This includes receiving funds and paperwork, filling out required forms, and seeking out the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your house before the purchase price is fully paid.

These are the pieces of paperwork that escrow holders usually look for:

  • 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

Upon completion of all instructions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then secure the title to the property and the title insurance gets dispersed as agreed upon in the escrow instructions.

The escrow company gets a payment at the completion of closing. I'll keep you updated on what comes next.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Petition title research
  • Comply with the bank's standards as specified in the escrow agreement
  • Intake funds from the buyer
  • Prorate tax, interest, insurance and other fees 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 monies and finalize instructions

The Escrow Holder Will Not:

  • Advise you - the escrow company stays a neutral, third-party status
  • Give insight about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Petition title research
  • Comply with lender's requirements as outlined in the escrow agreement
  • Intake payments from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are complete
  • Disburse monies and finalize instructions
  • Advise you - the escrow agent has to remain an impartial, 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.

Now you know more about being in escrow. And, you can be a better informed home buyer and future homeowner.

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