Whether it's your first place or your next house, I'll educate you through the process. E-mail me at charise@charisemitchell.com to get some free information.

What is Escrow?

 Charise Michell, Estate Agent, Wish Sotheby’s International Realty, CalBRE#01425090 can walk you through closing - (818) 269-1966
Escrow: To close the sale of a home, a neutral, third party (the escrow agent) is employed to assure the transaction will close correctly and on time. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. An everyday way to understand the concept of what an escrow company does is to think of the use of PayPal for Internet purchases.

The escrow holder insures that all terms and conditions of the seller's and buyer's negotiated agreement are performed prior to the sale being finished. This includes receiving monies and documents, signing required forms, and obtaining the release documents for any loans or liens that are to be paid off with the transaction, assuring you have a clean title to your property before the negotiated price is fully paid.

These are the legal forms that escrow companies usually look for:

  • 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
  • Tax statements

Closing on the house happens when all of the procedures of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then transferred to you as new homeowner and related title insurance is issued as outlined in the escrow instructions.

The escrow company receives a payment at the completion of closing. I'll keep you updated on the next steps.

The Escrow Holder Will:

  • Prepare escrow instructions
  • Perform a title search
  • Comply with lender's standards as noted in the escrow agreement
  • Accept payments from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been finished
  • Disburse payments and finish instructions

The Escrow Holder Won't:

  • Give advice - the escrow company stays a neutral, third-party status
  • Give insight about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Request title search
  • Comply with lender's guidelines as specified in the escrow agreement
  • Intake funds from the buyer
  • Prorate interest, insurance, tax and other payments 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 finish instructions
  • Give advice - the escrow agent stays a neutral, third-party status
  • Offer opinions about tax implications

Mortgage Escrow Account

Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Now you know more about being in escrow. And, you can be a more informed home buyer and future homeowner.