Understanding how Escrow works – Provident Realty Group, Dublin, CA

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Escrow 101

Provident Realty Group can walk you through closing - 9259999531

Let's talk about "escrow". When you're closing on your new home, an escrow company is used to insure the transaction will close correctly and in a specific time frame. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in an online auction, PayPal is the neutral third party that holds the buyer's payment, and then disburses the money to the seller.

The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's contract are met prior to the sale being finalized. This includes securing payments and documents, finishing required forms, and seeking out the release documents for any loans or liens that have been paid with the transaction, assuring you have a clean title to your property before the agreed upon price is fully paid.

Escrow holders look for the following legal 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 steps are finished in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out. The property's title is given to you and title insurance begins per the steps of your particular escrow agreement.

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

The Escrow Holder Will:

Prepare escrow guidelines
Perform a title research
Meet the bank's requirements as outlined in the escrow agreement
Intake payments from the buyer
Prorate insurance, tax, interest 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 met
Disburse monies and finish instructions

The Escrow Holder Won't:

Tell you what's best - the escrow company stays a neutral, third-party status
Dispense opinions about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow guidelines Petition title research Comply with the bank's guidelines as noted in the escrow agreement Intake funds from the buyer Prorate insurance, tax, interest and other payments according to guidelines Record deeds and other documents as instructed Request title insurance policy Close escrow when all instructions of seller and buyer have been finished Disburse payments and finish instructions		Offer advice - the escrow holder has to remain an impartial, 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 easy to understand guide about the escrow process. Your particular process will be different based on your bank and your escrow agent.

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