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

Escrow 101

 Berkshire Hathaway Home Services Fox & Roach, REALTORS® can walk you through closing - 609.822.8700
First, a little about "escrow". An escrow agent is brought on to assure your house closes on time and the transaction goes smoothly. 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 exchange of money takes place. For example, in an online purchase, PayPal is the neutral third party that holds the buyer's funds, and then disburses the funds to the seller.

The escrow agent makes sure that the terms and conditions of the agreement between the two parties are reached in preparation of the sale being completed.

Escrow agents compile the following legal 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
  • Loan documents

You're ready to close when each step of the finished in escrow process. All outstanding payments and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The property's title is given to you and title insurance begins per the policies of your individual escrow agreement.

When closing is finished, you'll make a payment to the escrow holder. As your agent, I'll let you know what is an acceptable form of payment.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Perform a title inquiry
  • Meet the bank's standards as outlined in the escrow agreement
  • Receive funds from the buyer
  • Prorate insurance, tax, interest and other payments 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 funds and finalize instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow company stays at an impartial, third-party status
  • Dispense opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Perform a title inquiry
  • Comply with lender's requirements as outlined in the escrow agreement
  • Intake payments from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • 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 finished
  • Disburse monies and finish instructions
  • Tell you what's best - the escrow agent stays a neutral, third-party status
  • Dispense opinions about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is started to make payments for on-going fees while there is a loan on the 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 how to close on your future home. And, you can be a more informed home buyer and future homeowner.

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