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

 RE/MAX Performance can walk you through closing - (919) 924-4991
First, a little about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is brought on to assure your property closes on time and the process goes smoothly. A place is said to be in escrow when in the closing process, funds is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. For example, in a Web auction, PayPal is the reliable third party that obtains the buyer's money, and then hands over the money to the seller.

The escrow agent is careful to assure that all terms and conditions of the seller's and buyer's agreement are completed prior to the sale being finalized. This includes getting monies and paperwork, signing required forms, and getting the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your place before the agreed upon price is fully paid.

Escrow agents want to acquire the following forms:

  • 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

Upon completion of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. The house's title gets transferred to you and title insurance begins per the policies of your individual escrow agreement.

When closing is completed, you'll pay the fees to the escrow company. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Petition title research
  • Meet the bank's standards as specified in the escrow agreement
  • Receive payments from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Give advice - the escrow company stays at an impartial, third-party status
  • Dispense opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Petition title research
  • Meet lender's requirements 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 paperwork as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer have been met
  • Disburse monies and finish instructions
  • Advise you - the escrow agent must stay at a fair, third-party status
  • Give insight about future tax estimations

Mortgage Escrow Account

Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

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

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