The Place is Almost Yours
To close the sale of a place, a neutral, third party (the escrow holder) is employed to assure the process will close perfectly and on time. A house is said to be in escrow when in the closing process, payment is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. PayPal is a good example of an escrow company.
The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are performed prior to the sale being finished.
Escrow holders look for the following forms:
- Tax statements
- 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
Closing on the house takes place when all of the procedures of the escrow are finished. All payments owed and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then receive the title to the home and the title insurance gets dispersed as outlined in the escrow instructions.
The escrow agent gets a payment when the closing is complete. You'll know when it's time to submit the form of payment.
Mortgage Escrow Account
A Mortgage Escrow Account is started to pay rolling expenses while there is a loan on the house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.
Now you know more about being in escrow. And, you can be a better informed home buyer and future homeowner.