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First-Time Home Buying: How To Close on a Place

 Oil Region Realty, LLC can walk you through closing - (814) 677-2326
First, a little about "escrow". When you're closing on your new property, an escrow agent is used to insure the process will close correctly and in a timely manner. Escrow agents hold money for "safe-keeping" in a deal between a buyer and seller. For example, in a Web auction, PayPal is the neutral third party that obtains the buyer's funds, and then sends the money to the seller.

The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are completed in preparation of the sale being finished.

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

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 home's title gets handed over to you and title insurance is issued per the policies of your particular escrow agreement.

The escrow holder receives a payment at the completion of closing. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Request title research
  • Meet lender's requirements as outlined in the escrow agreement
  • Accept payments from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Advise you - the escrow company must maintain a neutral, third-party status
  • Dispense opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow guidelines
  • Request title search
  • Meet the bank's requirements as written in the escrow agreement
  • Intake payments 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 funds and finish instructions
  • Tell you what's best - the escrow holder has to remain an impartial, third-party status
  • Offer opinions about the outcome of your taxes

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.

This is a quick run-down of the escrow process. Your specific plan may be different depending on your bank and your escrow agent.

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