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First-Time Home Buying: Closing

 Ender & Associates Realty can walk you through closing - (940) 325-2006
Let's talk about "escrow". To close the sale of a property, a neutral, third party (the escrow holder) is engaged to assure the process will close appropriately and on time. A house is said to be in escrow when in the closing process, funds is held by a third party on behalf of two parties when the transaction is taking place. An everyday way to understand what an escrow company does is to think of how you might use PayPal for Internet purchases.

Settling the last details like receiving funds, signing forms, securing the documents for loans and liens, and assuring you get a spotless title to the home before your purchase gets finalized are all part of the job of the escrow holder.

The pieces of paperwork the escrow holder may obtain include:

  • 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
  • Tax statements
  • Fire and other insurance policies

Upon finishing of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. The house's title gets transferred to you and title insurance begins per the policies of your particular escrow process.

When closing is completed, you'll submit a payment to the escrow company. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Petition title inquiry
  • Meet lender's guidelines as noted in the escrow agreement
  • Receive funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer have been finished
  • Disburse funds and finish instructions

The Escrow Holder Won't:

  • Advise you - the escrow agent has to remain an impartial, third-party status
  • Give insight about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Request title search
  • Meet lender's guidelines as noted in the escrow agreement
  • Intake payments from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • 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 monies and finalize instructions
  • Advise you - the escrow company must stay at a fair, 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.

Once you have the ABCs of the escrow process down, you can be a better buyer.

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