To finalize the sale of the home a neutral, third party (the escrow holder,
a.k.a. escrow agent) is engaged to assure the transaction will close
properly and on time. The escrow holder insures that all terms and
conditions of the seller's and buyer's agreement are met prior to the sale
being finalized, including receiving funds and documents, completing
required forms, and obtaining the release documents for any loans or liens
that have been paid off with the transaction, assuring you clear title to
your property before the purchase price is fully paid.
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The documentation the escrow holder may be collecting
includes:
- 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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Upon completion of all instructions of the escrow, closing can
take place. All outstanding payments and fees are collected and paid at
this time (covering expenses such as title insurance, inspections, real
estate commissions). Title to the property is then transferred to the
seller and appropriate title insurance is issued as outlined in the escrow
instructions.
At the close of escrow, payment of funds shall be made in an
acceptable form to the escrow. As your real estate agent, I'll inform you
of the acceptable form.
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The Escrow Holder
Will:
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The Escrow Holder
Won't:
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- Prepare
escrow instructions
- Request
title search
- Comply
with lender's requirements as specified in the escrow agreement
- Receive
funds from the buyer
- Prorate
insurance, tax, interest and other payments according to
instructions
- Record
deeds and other documents as instructed
- Request
title insurance policy
- Close
escrow when all instructions of seller and buyer have been met
- Disburse
funds and finalize instructions
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- Give
advice - the escrow holder must maintain neutral, third-party status
- Offer
opinions about tax implications
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Mortgage Escrow Account
A Mortgage Escrow Account is established to pay on-going
expenses while there is a loan on the house. These expenses include
property taxes, home insurance, mortgage insurance, and other escrow items.
Generally, the Escrow Account is partially funded at closing and the home
buyer makes on-going contributions through their monthly mortgage payment. |
