Buying Your Next Place: Closing

Escrow
When you're closing on your new place, an escrow company is used to ensure the transaction will close appropriately and in a timely manner. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a good example of an escrow company.

Tying up any loose ends like receiving funds, signing forms, securing the documents for loans and liens, and making sure you a clean title to the house before your purchase gets finalized are all parts of closing in which an escrow agent is useful.

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The documents the escrow company may obtain include: 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

Closing on the house happens when the steps of the escrow are finished. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. The property's title gets handed over to you and title insurance is issued per the steps of your particular escrow agreement.

When closing is completely finished, you'll make a payment to the escrow holder. As your real estate agent, I'll let you know what is an acceptable form of payment.

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow instructions Request title research Meet lender's standards as outlined in the escrow agreement Receive funds from the buyer Prorate tax, interest, insurance and other fees according to guidelines Record deeds and other legal documents as instructed Request title insurance policy Close escrow when all instructions of seller and buyer have been finished Disburse funds and finalize instructions		Tell you what's best - the escrow company stays a neutral, third-party status Give insight about future tax estimations

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

Now you know more about how to close on your future home. And, you can be a more informed home buyer and future homeowner.