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Escrow 101

 Ender & Associates Realty can walk you through closing - (940) 325-2006
Escrow: To close the sale of a house, a neutral, third party (the escrow company) is brought into the picture to assure the process will close appropriately and on time. A home 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 exchange of money takes place. For example, in a Web purchase, PayPal is the secure third party that obtains the buyer's money, and then disburses the payment to the seller.

The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are completed in preparation of the sale being finished.

Escrow companies collect the following forms:

  • 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
  • Tax statements

Upon completion of all instructions of the escrow, closing can take place. All outstanding payments and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The house's title goes to you and title insurance begins per the policies of your particular escrow process.

The escrow company receives a payment when the closing is complete. I'll keep you updated on what comes next.

The Escrow Holder Will:

  • Write escrow guidelines
  • Request title search
  • Meet lender's guidelines as specified in the escrow agreement
  • Receive payments from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse monies and finalize instructions

The Escrow Holder Won't:

  • Give advice - the escrow company has to remain an impartial, third-party status
  • Give insight about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Petition title search
  • Meet the bank's guidelines as specified in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse payments and finish instructions
  • Offer advice - the escrow agent must maintain a neutral, third-party status
  • Dispense opinions 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're comfortable with the escrow process, you can be a more assured buyer.

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