What is Escrow?
An escrow agent is used to assure your place closes on time and the process goes smoothly. Escrow agents hold money for "safe-keeping" in transactions between a buyer and seller. An everyday way to understand what an escrow company does is to think of the use of PayPal for Internet purchases.
The escrow holder insures that all terms and conditions of the seller's and buyer's negotiated agreement are met prior to the sale being completed. This includes receiving monies and certificates, signing required forms, and getting the release documents for any loans or liens that were cleared with the transaction, assuring you have a free title to your home before the agreed upon price is fully paid.
Escrow agents look for the following documents:
- 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
- Loan documents
- Tax statements
Upon finishing of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. The property's title is given to you and title insurance begins per the policies of your particular escrow agreement.
At the close of escrow, payments are submitted in an acceptable form to the escrow. I'll keep you up-to-date on the next steps.
The Escrow Holder Will:
The Escrow Holder Won't:
Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.
Once you have the ABCs of the escrow process down, you can be a more assured buyer.