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Closing the Sale
Escrow
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: |
- 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. |
