Buying Your Next Property: Closing

Escrow
To complete the sale of a place, a neutral, third party (the escrow company) is engaged to assure the process will close perfectly and on time. A property is said to be in escrow when in the closing transaction, funds is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. PayPal is a simple way to think of an escrow company.

Tying up any loose ends like obtaining funds, signing forms, getting the documents for loans and liens, and making sure you a clear title to the house in preparation of your purchase gets finalized are all part of the job of the escrow company.

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The documents the escrow agent may collect include: 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

Closing on the home takes place when the steps of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. You'll then get the title to the property and the title insurance gets issued as agreed upon in the escrow instructions.

At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:		The Escrow Holder Won't:
Write escrow guidelines Petition title inquiry Meet lender's standards as written in the escrow agreement Receive 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 instructions of seller and buyer have been met Disburse monies and finalize instructions		Tell you what's best - the escrow holder must stay at a fair, third-party status Give insight about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is started to pay recurring 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're comfortable with the escrow process, you can be a confident buyer.