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Escrow 101

 Nantahala Real Estate Company, INC can walk you through closing - 8283213101
First, a little about "escrow". When you're closing on your new property, an escrow company is used to make sure the transaction will close appropriately and on time. Escrow holders hold money for "safe-keeping" in a deal between a buyer and seller. For example, in a Web purchase, PayPal is the neutral third party that obtains the buyer's cash, 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 contract are reached prior to the sale being completed. This includes securing funds and paperwork, signing required forms, and seeking out the release documents for any loans or liens that are to be paid off with the transaction, assuring you have a free title to your place before the negotiated price is fully paid.

Escrow companies look for the following forms:

  • 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 every step is done in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the property is then transferred to you as new homeowner and correct title insurance is issued as noted in the escrow policy.

The escrow agent gets a payment when the closing is complete. I'll keep you informed on the next steps.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Request title search
  • Comply with lender's requirements 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 legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow company stays at an impartial, third-party status
  • Give insight about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Petition title inquiry
  • Comply with lender's requirements as specified in the escrow agreement
  • Intake funds from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse payments and finalize instructions
  • Give advice - the escrow company must maintain a neutral, third-party status
  • Dispense opinions about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is started to make payments for on-going expenses 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 have the basics of the escrow process down, you can be a confident buyer.

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