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What is Escrow?

 Stoneridge Realty & Property Management Services can walk you through closing - 760-727-3776
Let's talk about "escrow". An escrow company is used to assure your home closes on time and the money exchanging part of closing goes smoothly. Escrow companies hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a good example of an escrow company.

The escrow agent 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 payments and certificates, filling out required forms, and getting the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your house before the negotiated price is fully paid.

Escrow companies collect the following documents:

  • 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

You're ready to close when all parts are done in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. The home's title gets handed over to you and title insurance is issued per the policies of your particular escrow process.

When closing is completed, you'll pay the fees to the escrow holder. I'll keep you up-to-date on the next steps.

The Escrow Holder Will:

  • Prepare escrow instructions
  • Petition title research
  • Comply with the bank's standards as outlined in the escrow agreement
  • Receive payments from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other legal documents as instructed
  • Obtain 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 Will Not:

  • Advise you - the escrow agent must stay at a fair, third-party status
  • Dispense opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow guidelines
  • Request title research
  • Meet the bank's standards as noted in the escrow agreement
  • Receive payments from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are met
  • Disburse funds and finish instructions
  • Advise you - the escrow agent must maintain a neutral, third-party status
  • Dispense 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. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

This is a simple outline of the escrow process. Your individual process may vary depending on your lender and your escrow company.