Buying real estate for the first time can be intimidating. I can help.
Call me at (405) 562-0886.
I'll Champion for You Through Closing
Let's talk about "escrow". To complete the sale of a place, a neutral, third party (the escrow agent) is employed to assure the process will close correctly and on time.
When money is held by a third party in a transaction between a buyer and a seller, it's in escrow.
For example, in a Web purchase, PayPal is the secure third party that obtains the buyer's money, and then sends the payment to the seller.
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 getting funds and paperwork, filling out required forms, and obtaining the release documents for any loans or liens that are to be paid off with the transaction, assuring you have a clear title to your property before the purchase price is fully paid.
These are the documents that escrow holders usually compile:
- 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
- Loan documents
Closing on the house takes place when the steps of the escrow are complete.
All outstanding payments and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions).
Title to the house is then given to you as new owner and related title insurance is issued as outlined in the escrow policy.
At the close of escrow, payments of funds are made in an acceptable form to the escrow.
You'll know when it's time to submit the form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
- Prepare escrow instructions
- Petition title inquiry
- Comply with the bank's requirements as specified in the escrow agreement
- Accept funds from the buyer
- Prorate interest, insurance, tax and other payments according to guidelines
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all terms of agreement of seller and buyer have been met
- Disburse payments and finalize instructions
- Tell you what's best - the escrow holder stays at an impartial, third-party status
- Give insight 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.
Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.
This is a easy to understand guide about the escrow process. Your specific plan may be unique based on your bank and your escrow agent.