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To finalize the sale of the home a neutral, third party (the escrow
holder, a.k.a. escrow agent) is engaged to assure 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.
The documentation the escrow holder may be collecting 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
Upon completion of all instructions of the escrow, closing can
take place. All outstanding payments and fees are collected and
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 the close of escrow, payment of funds shall be made in an acceptable
for to the escrow. As your real estate agent, I'll inform you of
the acceptable form.
The Escrow Holder Will:
- 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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The Escrow Holder Won't:
- Give advice - the escrow holder must maintain neutral,
third-party status
- Offer opinions about tax implications
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Mortgage Escrow Account
A Mortgage Escrow Account is established to pay on-going expenses
while there is a loan on the house. These expenses include property
taxes, home insurance, mortgage insurance, and other escrow items.
Generally, the Escrow Account is partially funded at closing and
the home buyer makes on-going contributions through their monthly
mortgage payment.
Courtesy of Fidelity National Title
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