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First, a little about "escrow". When you're closing on your new property, an escrow company is used to make sure the process will close correctly and on time. Escrow companies hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a good example of an escrow company.

The escrow agent makes sure that the terms and conditions of the agreement between the sellers and the buyers are completed prior to the sale being finalized.

These are the legal forms that escrow companies usually look for:

  • 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
  • Title insurance policies

Upon completion of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are paid out. Title to the house is then given to you as new owner and related title insurance is issued as outlined in the escrow policy.

When closing is completely finished, you'll pay the fees to the escrow holder. I'll keep you updated on the procedure.

The Escrow Holder Will:

  • Write escrow instructions
  • Request title research
  • Meet the bank's standards as outlined in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax 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 complete
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Advise you - the escrow agent must maintain a neutral, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow guidelines
  • Petition title inquiry
  • Comply with lender's standards as noted in the escrow agreement
  • Receive payments from the buyer
  • Prorate interest, insurance, tax and other payments 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 met
  • Disburse funds and finalize instructions
  • Give advice - the escrow holder must maintain a neutral, third-party status
  • Dispense 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.

Once you're familiar with the escrow process, you can be a more assured buyer.

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