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

 The Virtual Real Estate Team can walk you through closing - (405) 509-5335
Escrow: To finalize the sale of a property, a neutral, third party (the escrow agent) is employed to assure the process will close correctly and on time. A house is said to be in escrow when in the closing process, funds is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. An everyday way to think of what an escrow company does is to think of how you might use PayPal for Internet purchases.

The escrow company is careful to assure that all terms and conditions of the seller's and buyer's agreement are reached prior to the sale being finished. This includes receiving monies and documents, completing required forms, and seeking out the release documents for any loans or liens that have been paid off with the transaction, assuring you have a clean title to your house before the final price is fully paid.

Escrow holders collect the following forms:

  • 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

Upon finishing of all instructions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. The home's title gets handed over to you and title insurance is issued per the policies of your individual escrow process.

The escrow holder gets 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 inquiry
  • Meet the bank's requirements as specified in the escrow agreement
  • Receive funds 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 instructions of seller and buyer are complete
  • Disburse monies and finalize instructions

The Escrow Holder Will Not:

  • Give advice - the escrow company must maintain a neutral, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Petition title research
  • Comply with lender's standards as written in the escrow agreement
  • Intake funds from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • 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
  • Tell you what's best - the escrow company stays at an impartial, third-party status
  • Give insight 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. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

Once you're at ease with the escrow process, you can be a more assured buyer.

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