What to Expect When You're in Escrow

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First, a little about "escrow". When you're closing on your new place, an escrow company is used to insure the transaction will close properly and in a specific time frame. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an online auction, PayPal is the secure third party that obtains the buyer's money, and then sends the funds to the seller.

The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are completed prior to the sale being finalized.

These are the legal forms that escrow companies usually look for:

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

Closing on the house takes place when all of the procedures of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. You'll then secure the title to the home and the title insurance gets dispersed as agreed upon in the escrow instructions.

The escrow agent receives a payment when the closing is complete. I'll keep you updated on the procedure.

The Escrow Holder Will:

Assemble escrow guidelines
Petition title research
Meet the bank's requirements as written in the escrow agreement
Intake payments from the buyer
Prorate interest, insurance, tax and other payments according to guidelines
Record deeds and other legal documents as instructed
Request title insurance policy
Close escrow when all terms of agreement of seller and buyer have been met
Disburse payments and finalize instructions

The Escrow Holder Won't:

Give advice - the escrow holder must maintain a neutral, third-party status
Offer opinions about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow guidelines Perform a title search Meet lender's guidelines as written 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 instructions of seller and buyer have been finished Disburse monies and finalize instructions		Advise you - the escrow agent stays a neutral, third-party status Offer opinions about the outcome of your taxes

Mortgage Escrow Account

Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Now you know more about how to close on your future home. And, you can be a more informed home buyer and future homeowner.

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