Whether it's your first property or your next house, We'll educate you through the process.
E-mail us at
Ron@hmcnyc.com.
Escrow 101
First, a little about "escrow". An escrow agent is used 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.
PayPal is a simple way to think of an escrow company.
The escrow company is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are met prior to the sale being finished. This includes getting funds and paperwork, completing required forms, and getting the release documents for any loans or liens that were paid off with the transaction, assuring you have a free title to your place before the final price is fully paid.
The pieces of paperwork the escrow company may collect include:
- 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
Closing on the home happens when the steps of the escrow are finished.
All expenses like title insurance, inspections and real estate commissions are paid.
You'll then get the title to the property and the title insurance gets issued as noted in the escrow instructions.
When closing is completed, you'll make a payment to the escrow holder.
We'll keep you informed on what comes next.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Write escrow guidelines
- Petition title inquiry
- Meet lender's requirements as specified in the escrow agreement
- Receive funds from the buyer
- Prorate tax, interest, insurance and other fees according to guidelines
- Record deeds and other documents as instructed
- Obtain title insurance policy
- Close escrow when all instructions of seller and buyer have been met
- Disburse payments and finish instructions
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- Tell you what's best - the escrow company stays a neutral, third-party status
- Offer opinions about tax implications
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Mortgage Escrow Account
Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created.
Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.
Now you know more about how to close on your future home. And, you can be a more informed home buyer and future homeowner.