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

 J. Briann Realty Group, Inc. can walk you through closing - 561-688-1316
Let's talk about "escrow". To complete the sale of a house, a neutral, third party (the escrow holder) is employed to assure the transaction will close properly and on time. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. An easy way to understand the concept of what an escrow company does is to compare it to PayPal for Internet purchases.

The escrow company insures that all terms and conditions of the seller's and buyer's negotiated agreement are performed prior to the sale being finished. This includes receiving funds and certificates, completing required forms, and getting the release documents for any loans or liens that were paid with the transaction, assuring you have a clear title to your home before the agreed upon price is fully paid.

Escrow holders compile the following documents:

  • 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 finishing of all instructions of the escrow, closing can take place. All debts and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then get the title to the property and the title insurance gets dispersed as stated in the escrow instructions.

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

The Escrow Holder Will:

  • Write escrow guidelines
  • Request title inquiry
  • Meet the bank's standards as written in the escrow agreement
  • Intake funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse funds and finalize instructions

The Escrow Holder Won't:

  • Tell you what's best - the escrow agent stays a neutral, third-party status
  • Offer opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Request title search
  • Comply with lender's standards as specified in the escrow agreement
  • Intake payments from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are met
  • Disburse payments and finish instructions
  • Offer advice - the escrow holder stays at an impartial, third-party status
  • Dispense opinions about tax implications

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 individual plan might be different based on your lender and your escrow agent.

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