The House is Almost Yours
To finalize the sale of a property, a neutral, third party (the escrow agent) is employed to assure the transaction will close properly and on time. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. An easy way to understand what an escrow company does is to think of how you might use PayPal for Internet purchases.
Tying up any loose ends like taking in funds, finishing forms, obtaining the documents for loans and liens, and assuring you get a clean title to the property before your purchase gets finalized are all part of the job of the escrow holder.
The records the escrow company may collect include:
- 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
You're ready to close when each step of the finished in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then transferred to you as now current homeowner and related title insurance is issued as noted 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
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 how to close on your future home. And, you can be a more confident home buyer and future homeowner.