Rules for Using an Escrow Company

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What To Expect When You're Closing in Topton, North Carolina

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First, a little about "escrow". When you're closing on your new house, a neutral, third party (known as the escrow holder or the escrow agent) is used to ensure the transaction will close appropriately and in a certain amount of time. A place is said to be in escrow when in the closing transaction, payment is held by a third party on behalf of two parties when the transaction is taking place. PayPal is a simple way to think of an escrow company.

The escrow company makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are completed prior to the sale being finished. This includes getting funds and documents, signing required forms, and seeking out the release documents for any loans or liens that have been paid with the transaction, assuring you have a free title to your property before the negotiated price is fully paid.

Escrow holders want to acquire the following 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
Loan documents

You're ready to close when each step of the complete in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are paid out. You'll then get the title to the property and the title insurance gets dispersed as stated in the escrow instructions.

The escrow agent gets a payment when the closing is complete. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

Prepare escrow guidelines
Petition title research
Comply with the bank's standards as noted 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 instructions of seller and buyer have been met
Disburse funds and finish instructions

The Escrow Holder Won't:

Offer advice - the escrow company has to remain an impartial, third-party status
Give insight about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Write escrow instructions Perform a title inquiry Meet the bank's requirements as outlined 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 Obtain title insurance policy Close escrow when all terms of agreement of seller and buyer have been finished Disburse payments and finish instructions		Give advice - the escrow company must stay at a fair, third-party status Give insight about future tax estimations

Mortgage Escrow Account

A Mortgage Escrow Account is used to make payments for on-going fees while there is a loan on the house. Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.

This is a simple outline of the escrow process. Your particular process will vary based on your bank and your escrow holder.

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