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First-Time Home Buying: How To Close on a House

 RE/MAX Performance can walk you through closing - (919) 924-4991
Escrow: When you're closing on your new house, an escrow company is used to assure the process will close appropriately and in a certain amount of time. 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.

Tying up any loose ends like obtaining funds, completing forms, obtaining the documents for loans and liens, and assuring you get a clean title to the home in preparation of your purchase gets finalized are all part of the job of the escrow company.

The pieces of paperwork the escrow holder may obtain include:

  • 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
  • Title insurance policies

Upon finishing of all instructions of the escrow, closing can take place. All payments owed and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). The home's title is given to you and title insurance is issued per the steps of your individual escrow process.

When closing is completed, you'll make a payment to the escrow agent. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Write escrow instructions
  • Request title inquiry
  • Meet the bank's standards as noted in the escrow agreement
  • Intake payments from the buyer
  • Prorate insurance, tax, interest and other payments according to guidelines
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse payments and finish instructions

The Escrow Holder Will Not:

  • Give advice - the escrow holder stays a neutral, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Request title research
  • Meet the bank's requirements as written in the escrow agreement
  • Accept funds from the buyer
  • Prorate insurance, tax, interest and other payments according to guidelines
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are met
  • Disburse monies and finish instructions
  • Tell you what's best - the escrow company must maintain a neutral, third-party status
  • Give insight about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is started 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.

Now you know more about how to close on your future home. And, you can be a more informed home buyer and future homeowner.

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