Whether it's your first property or your next house, I'll advise you through the process.
Steps to Closing on a Property
First, a little about "escrow". When you're closing on your new home, an escrow company is used to insure the transaction will close appropriately and in a specific time frame.
A house is said to be in escrow when in the closing transaction, money is secured by a third party on behalf of two parties when the transaction is taking place.
PayPal is a good example of an escrow company.
The escrow holder insures that all terms and conditions of the seller's and buyer's agreement are performed prior to the sale being finalized. This includes receiving monies and certificates, completing required forms, and seeking out the release documents for any loans or liens that were paid with the transaction, assuring you have a clean title to your house before the purchase price is fully paid.
The documents the escrow company may secure include:
- 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
- Terms of sale and any seller-assisted financing
Upon completion of all instructions of the escrow, closing can take place.
All expenses like title insurance, inspections and real estate commissions are paid.
You'll then get the title to the home and the title insurance gets issued as noted in the escrow instructions.
The escrow company gets a payment at the completion of closing.
As your agent, I'll inform you of the acceptable form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
- Write escrow instructions
- Petition title search
- Comply with the bank's guidelines as noted in the escrow agreement
- Receive payments from the buyer
- Prorate tax, interest, insurance and other fees according to instructions
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer are complete
- Disburse funds and finish instructions
- Advise you - the escrow company has to remain an impartial, third-party status
- Give insight about tax implications
Mortgage Escrow Account
A Mortgage Escrow Account is started to pay rolling expenses while there is a loan on the 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 at ease with the escrow process, you can be a confident buyer.