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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
Let's talk about "escrow". To finalize the sale of a property, a neutral, third party (the escrow agent) is employed to assure the process will close appropriately and on time. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. A simple way to understand what an escrow company does is to think of how you might use PayPal for Internet purchases.

The escrow holder makes sure that all terms and conditions of the seller's and buyer's contract are reached prior to the sale being completed. This includes getting funds and documents, completing required forms, and getting the release documents for any loans or liens that have been paid with the transaction, assuring you have a free title to your house before the asking price is fully paid.

Escrow companies look for the following records:

  • 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

You're ready to close when all steps are finished in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then obtain the title to the home and the title insurance gets issued as stated in the escrow instructions.

At the close of escrow, payments are submitted in an acceptable form to the escrow. I'll keep you updated on what comes next.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Perform a title search
  • Comply with the bank's requirements as written in the escrow agreement
  • Receive payments from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are met
  • Disburse monies and finish instructions

The Escrow Holder Will Not:

  • Offer advice - the escrow company must maintain a neutral, third-party status
  • Dispense opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Petition title search
  • Meet lender's requirements as specified in the escrow agreement
  • Receive payments from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been finished
  • Disburse monies and finalize instructions
  • Offer advice - the escrow agent has to remain an impartial, third-party status
  • Offer opinions about future tax estimations

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.

This is a easy to understand guide about the escrow process. Your specific process could be slightly different depending on your lender and your escrow holder.

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