What is Escrow?
Escrow
To complete the sale of a home, a neutral, third party (the escrow agent) is engaged to assure the transaction will close correctly and on time.
When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow.
PayPal is a simple way to think of an escrow company.
Settling the last details like receiving funds, completing forms, getting the documents for loans and liens, and making sure you a clean title to the property in preparation of your purchase gets finalized are all part of the job of the escrow holder.
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Whether it's your first home or your next home, we'll help you through the process.
Contact us and we'll help you become a empowered buyer.
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These are the legal forms that escrow companies usually look to collect:
- 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
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You're ready to close when all steps are finished in escrow process.
All outstanding payments and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions).
Title to the property is then given to you as new homeowner and appropriate title insurance is issued as outlined in the escrow policy.
When closing is in it's last step, you'll pay the fees to the escrow holder.
As your REALTOR, I'll inform you of the acceptable way of paying.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Prepare escrow instructions
- Request title research
- Meet lender's guidelines as noted in the escrow agreement
- Accept funds from the buyer
- Prorate insurance, tax, interest and other payments according to instructions
- Record deeds and other legal documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer are met
- Disburse monies and finalize instructions
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- Offer advice - the escrow agent must stay at a fair, third-party status
- Offer opinions about the outcome of your taxes
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Mortgage Escrow Account
A Mortgage Escrow Account is established to make payments for recurring fees while there is a loan on the house.
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.
This is a easy to understand guide about the escrow process. Your individual plan may be different based on your bank and your escrow agent.
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