Closing the Sale in Sherman Oaks
First, a little about "escrow". When you're closing on your new property, a neutral, third party (known as the escrow holder or the escrow agent) is used to insure the transaction will close properly and in a timely manner. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. An easy way to understand the concept of what an escrow company does is to think of how you might use PayPal for online purchases.
Tying up any loose ends like obtaining funds, signing forms, getting the documents for loans and liens, and assuring you get a clear title to the home in preparation of your purchase gets finalized are all part of the job of the escrow agent.
These are the records that escrow holders usually look to collect:
- 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
Closing on the home happens when the steps of the escrow are finished. All expenses like title insurance, inspections and real estate commissions are paid. You'll then receive the title to the home and the title insurance gets dispersed as noted in the escrow instructions.
When closing is finished, you'll submit a payment to the escrow holder. As your agent, I'll let you know what is an acceptable way of paying.
The Escrow Holder Will:
- Write escrow instructions
- Petition title search
- Meet the bank's requirements as outlined in the escrow agreement
- Accept payments from the buyer
- Prorate interest, insurance, tax and other payments according to guidelines
- Record deeds and other legal documents as instructed
- Request title insurance policy
- Close escrow when all terms of agreement of seller and buyer have been finished
- Disburse payments and finish instructions
The Escrow Holder Will Not:
- Advise you - the escrow agent stays at an impartial, third-party status
- Give insight about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
- Assemble escrow instructions
- Request title search
- Comply with the bank's standards as noted in the escrow agreement
- Receive funds from the buyer
- Prorate insurance, tax, interest and other payments according to instructions
- Record deeds and other paperwork as instructed
- Obtain title insurance policy
- Close escrow when all instructions of seller and buyer are met
- Disburse funds and finish instructions
- Give advice - the escrow holder must maintain a neutral, third-party status
- Give insight about the outcome of your taxes
Mortgage Escrow Account
A Mortgage Escrow Account is started to make payments for rolling expenses while there is a loan on the house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.
Once you have the ABCs of the escrow process down, you can be a confident buyer.