Purchasing a house for the first time can be confusing. Let me help you.
and I'll make sure you're a empowered buyer.
First-Time Home Buying: How To Close on a Home
First, a little about "escrow". An escrow holder is used to assure your house closes on time and the money exchanging part of closing goes smoothly.
When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow.
A simple way to understand what an escrow company does is to think of how you might use PayPal for online purchases.
Settling the last details like receiving funds, completing forms, getting the documents for loans and liens, and assuring you get a clear title to the home prior to your purchase gets finalized are all part of the job of the escrow company.
These are the legal documents that escrow agents usually compile:
- 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
You're ready to close when each step of the done in escrow process.
All expenses like title insurance, inspections and real estate commissions are paid.
Title to the home is then transferred to you as now current homeowner and appropriate title insurance is issued as noted in the escrow policy.
When closing is finished, you'll submit a payment to the escrow company.
As your agent, I'll let you know what is an acceptable form of payment.
The Escrow Holder Will:
The Escrow Holder Won't:
- Write escrow guidelines
- Perform a title inquiry
- Meet the bank's standards as specified in the escrow agreement
- Intake funds from the buyer
- Prorate tax, interest, insurance and other fees according to instructions
- Record deeds and other paperwork as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer have been finished
- Disburse monies and finish instructions
- Tell you what's best - the escrow company must stay at a fair, third-party status
- Dispense opinions about the outcome of your taxes
Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your 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 smarter home buyer and future homeowner.