Whether it's your first property or your next home, I'll help you through the process. Call me at 512-834-1600.
The Property is Almost Yours
First, a little about "escrow". To close the sale of a place, a neutral, third party (the escrow company) is employed to assure the transaction will close perfectly and on time. A house is said to be in escrow when in the closing transaction, money is secured by a third party on behalf of two parties when the transaction is taking place. An easy way to understand what an escrow company does is to compare it to PayPal for online purchases.
The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's contract are met prior to the sale being finished. This includes receiving payments and paperwork, filling out required forms, and getting the release documents for any loans or liens that have been cleared with the transaction, assuring you have a clean title to your property before the agreed upon price is fully paid.
The documents the escrow holder may collect include:
- 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
Closing on the house happens when all of the procedures of the escrow are done. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. Title to the house is then transferred to you as now current homeowner and related title insurance is issued as noted in the escrow policy.
When closing is completely finished, you'll pay the fees to the escrow company. As your real estate professional, I'll let you know what is an acceptable form of payment.
The Escrow Holder Will:
- Write escrow instructions
- Request title search
- Comply with lender's guidelines as written in the escrow agreement
- Intake funds from the buyer
- Prorate interest, insurance, tax and other payments according to instructions
- Record deeds and other documents as instructed
- Obtain title insurance policy
- Close escrow when all terms of agreement of seller and buyer have been met
- Disburse monies and finish instructions
The Escrow Holder Will Not:
- Offer advice - the escrow company must maintain a neutral, third-party status
- Offer opinions about future tax estimations
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The Escrow Holder Will:
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The Escrow Holder Won't:
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- Write escrow guidelines
- Request title inquiry
- Meet lender's guidelines as outlined in the escrow agreement
- Intake funds from the buyer
- Prorate insurance, tax, interest and other payments according to guidelines
- Record deeds and other documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer are complete
- Disburse monies and finish instructions
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- Tell you what's best - the escrow company stays at an impartial, third-party status
- Dispense opinions about tax implications
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Mortgage Escrow Account
A Mortgage Escrow Account is established to make payments for on-going fees while there is a loan on the house. 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.
This is a easy to understand guide about the escrow process. Your particular plan might be slightly different depending on your lender and your escrow holder.