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Buying Your Next Property: Closing

 Stoneridge Realty & Property Management Services can walk you through closing - 760-727-3776
Let's talk about "escrow". When you're closing on your new property, an escrow holder is used to assure the process will close properly and in a specific time frame. A home is said to be in escrow when in the closing process, money is secured by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. For example, in a Web purchase, PayPal is the secure third party that holds the buyer's funds, and then sends the money to the seller.

Tying up any loose ends like taking in funds, signing forms, securing the documents for loans and liens, and making sure you get a clear title to the house before your purchase gets finalized are all parts of closing in which an escrow company is useful.

These are the documents that escrow companies usually look for:

  • Loan documents
  • 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

Closing on the home happens when all of the procedures of the escrow are complete. All outstanding payments and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then given to you as now current homeowner and correct title insurance is issued as outlined in the escrow policy.

At the close of escrow, payments of funds are made 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 inquiry
  • Comply with lender's requirements as outlined in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other documents as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse payments and finish instructions

The Escrow Holder Won't:

  • Give advice - the escrow holder must maintain a neutral, third-party status
  • Offer opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Perform a title inquiry
  • Comply with lender'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 documents as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse monies and finish instructions
  • Offer advice - the escrow holder has to remain an impartial, third-party status
  • Give insight about the outcome of your taxes

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 quick run-down of the escrow process. Your individual plan will be unique based on your lender and your escrow holder.