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Steps to Closing on a Home

 In Home Realty can walk you through closing - (626) 608-7310
Let's talk about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is hired to assure your property closes on time and the transaction goes smoothly. A property is said to be in escrow when in the closing process, funds is secured by a third party on behalf of two parties when the exchange of money takes place. An easy way to understand what an escrow company does is to think of the use of PayPal for online purchases.

Tying up any loose ends like taking in funds, finishing forms, getting the documents for loans and liens, and assuring you get a clear title to the house prior to your purchase gets finalized are all part of the job of the escrow company.

These are the documents that escrow agents usually compile:

  • 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 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). You'll then receive the title to the property and the title insurance gets issued as noted in the escrow instructions.

At the close of escrow, fees are paid in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Petition title research
  • Comply with the bank's requirements as outlined in the escrow agreement
  • Intake funds from the buyer
  • Prorate insurance, tax, interest and other payments 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 finalize instructions

The Escrow Holder Won't:

  • Tell you what's best - the escrow holder stays at an impartial, third-party status
  • Give insight about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Perform a title search
  • Meet lender's requirements as specified in the escrow agreement
  • Intake funds from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other paperwork as instructed
  • Obtain 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 agent has to remain an impartial, third-party status
  • Offer opinions about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is established to make payments for on-going expenses while there is a loan on the house. Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.

This is a quick run-down of the escrow process. Your specific plan might vary depending on your lender and your escrow holder.

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