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First-Time Home Buying: How To Close on a Place

 Charise Michell, Estate Agent, Wish Sotheby’s International Realty, CalBRE#01425090 can walk you through closing - (818) 269-1966
Escrow: An escrow holder is hired to assure your place closes on time and the transaction goes smoothly. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. For example, in a Web purchase, PayPal is the secure third party that obtains the buyer's money, and then hands over the funds to the seller.

Settling the last details like obtaining funds, finishing forms, securing the documents for loans and liens, and assuring you get a clean title to the house in preparation of your purchase gets finalized are all parts of closing in which an escrow agent is useful.

These are the legal forms that escrow agents usually compile:

  • 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

Upon finishing of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are paid out. You'll then secure the title to the property and the title insurance gets issued as agreed upon in the escrow instructions.

At the close of escrow, payments are submitted in an acceptable form to the escrow. I'll keep you up-to-date on what comes next.

The Escrow Holder Will:

  • Write escrow instructions
  • Petition title research
  • Comply with the bank's standards 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 documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer have been met
  • Disburse monies and finish instructions

The Escrow Holder Won't:

  • Offer advice - the escrow company has to remain an impartial, third-party status
  • Offer opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Request title inquiry
  • Meet the bank's standards as outlined in the escrow agreement
  • Receive payments 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 instructions of seller and buyer are complete
  • Disburse payments and finalize instructions
  • Offer advice - the escrow holder must stay at a fair, third-party status
  • Offer opinions about future tax estimations

Mortgage Escrow Account

Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

Once you're familiar with the escrow process, you can be a informed buyer.