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What is Escrow?

 In Home Realty can walk you through closing - 6266087310
Let's talk about "escrow". An escrow agent is hired to assure your place closes on time and the process goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. An everyday way to understand what an escrow company does is to compare it to PayPal for online purchases.

The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's contract are completed prior to the sale being completed. This includes receiving monies and documents, finishing required forms, and obtaining the release documents for any loans or liens that were paid with the transaction, assuring you have a clean title to your home before the final price is fully paid.

The records the escrow agent may secure include:

  • Requests for payment for various services to be paid out of escrow funds
  • Loan documents
  • Tax statements
  • Fire and other insurance policies
  • Title insurance policies
  • Terms of sale and any seller-assisted financing

You're ready to close when each step of the done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. Title to the home is then transferred to you as buyer and related title insurance is issued as outlined in the escrow instructions.

At the close of escrow, payments are submitted in an acceptable form to the escrow. I'll keep you up-to-date on what comes next.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Petition title search
  • Comply with the bank's standards as written in the escrow agreement
  • Intake payments from the buyer
  • Prorate insurance, tax, interest and other payments 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 payments and finalize instructions

The Escrow Holder Won't:

  • Give advice - the escrow company stays a neutral, third-party status
  • Dispense opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Request title search
  • Comply with lender's guidelines as written in the escrow agreement
  • Accept payments from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse payments and finish instructions
  • Advise you - the escrow company must maintain a neutral, third-party status
  • Offer opinions about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is used to make payments for recurring fees 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 how to close on your future home. And, you can be a better informed home buyer and future homeowner.


In Home Realty

DRE# 01871754

319 E San Bernardino Road
Covina, CA 91723-1627