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Closing the Sale
Escrow
To finalize the sale of a home, a neutral, third party (the escrow holder or escrow agent) assures the transaction will close properly and on time. The escrow holder insures that all terms and conditions of the seller's and buyer's agreement are met prior to the sale being finalized, including receiving funds and documents, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring you clear title to your property before the purchase price is fully paid.
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The documentation your escrow holder may collect includes:
- Loan documents
- 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
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After all instructions of the escrow & lender are completed, closing can take place! All closing fees are paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then transferred to the seller and appropriate title insurance is issued as outlined in the escrow instructions.
At closing, payment of funds shall be made in an acceptable form to the escrow. As a mortgage broker, we'll inform you of the acceptable payments.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Prepare escrow instructions
- Request title search
- Comply with lender's requirements as specified in the escrow agreement
- Receive funds from the buyer
- Prorate insurance, tax, interest 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 have been met
- Disburse funds and finalize instructions
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- Give advice - the escrow holder must maintain neutral, third-party status
- Offer opinions about tax implications
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Mortgage Escrow Account
Your Mortgage Escrow Account is established and required to pay on-going expenses while there is a loan on the house over 80% of the value. These expenses include property taxes, home insurance, mortgage insurance (if applicable), and other items. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions included in the monthly mortgage payment. |