Rules for Using an Escrow Company

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Closing the Sale in Topton, North Carolina

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Escrow: To finish the sale of a home, a neutral, third party (the escrow company) is employed to assure the transaction will close appropriately and on time. A place is said to be in escrow when in the closing transaction, money 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. An everyday way to understand what an escrow company does is to think of how you might use PayPal for Internet purchases.

The escrow company makes sure that the terms and conditions of the agreement between the seller and buyer are met in preparation of the sale being finished.

The documents the escrow agent may secure include:

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
Loan documents

Closing on the house happens when all of the procedures of the escrow are complete. At this time, all payments and fees for inspections, title insurance and real estate commissions are paid out. Title to the house is then given to you as buyer and related title insurance is issued as outlined in the escrow policy.

At the close of escrow, payments are submitted in an acceptable form to the escrow. As your agent, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:

Write escrow instructions
Petition title inquiry
Meet the bank's standards as outlined in the escrow agreement
Accept payments from the buyer
Prorate tax, interest, insurance and other fees according to guidelines
Record deeds and other paperwork as instructed
Obtain title insurance policy
Close escrow when all terms of agreement of seller and buyer have been met
Disburse payments and finalize instructions

The Escrow Holder Won't:

Give advice - the escrow holder must stay at a fair, third-party status
Dispense opinions about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow guidelines Petition title search Meet lender's requirements as outlined in the escrow agreement Receive payments from the buyer Prorate tax, interest, insurance and other fees according to instructions Record deeds and other paperwork as instructed Request title insurance policy Close escrow when all terms of agreement of seller and buyer are met Disburse funds and finalize instructions		Tell you what's best - the escrow holder stays a neutral, third-party status Give insight about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is used to pay recurring fees while there is a loan on the house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Once you're at ease with the escrow process, you can be a more assured buyer.

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