Whether it's your first home or your next property, I'll walk you through the process. E-mail me at charise@charisemitchell.com .

What is Escrow?

 Charise Michell, Estate Agent, Wish Sotheby’s International Realty, CalBRE#01425090 can walk you through closing - (818) 269-1966
First, a little about "escrow". To complete the sale of a home, a neutral, third party (the escrow holder) is brought into the picture to assure the transaction will close correctly and on time. Escrow agents hold money for "safe-keeping" in transactions between a buyer and seller. For example, in an online transaction, PayPal is the secure third party that obtains the buyer's cash, and then sends the payment to the seller.

Settling the last details like obtaining funds, signing forms, obtaining the documents for loans and liens, and making sure you get a clean title to the home before your purchase gets finalized are all part of the job of the escrow company.

The documents the escrow company 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 portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. The house's title is given to you and title insurance is issued per the steps of your particular escrow agreement.

The escrow holder receives a payment at the completion of closing. As your REALTOR, I'll inform you of the acceptable way of paying.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Petition title research
  • Meet lender's standards as noted in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been met
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow company must maintain a neutral, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Request title research
  • Meet the bank's guidelines as noted 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 met
  • Disburse funds and finish instructions
  • Advise you - the escrow agent must stay at a fair, third-party status
  • Offer opinions about tax implications

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

This is a simple outline of the escrow process. Your specific plan may be different depending on your bank and your escrow agent.