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

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Completing the Transaction

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Let's talk about "escrow". An escrow holder is hired to assure your property closes on time and the transaction goes smoothly. A home is said to be in escrow when in the closing transaction, funds is held by a third party on behalf of two parties when the exchange of money takes place. PayPal is a good example of an escrow company.

The escrow agent makes sure that the terms and conditions of the agreement between the sellers and the buyers are performed in preparation of the sale being completed.

Escrow holders collect the following pieces of paperwork:

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 every step is finished in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are paid out. You'll then receive the title to the home and the title insurance gets dispersed as agreed upon in the escrow instructions.

At the close of escrow, payments are submitted in an acceptable form to the escrow. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

Assemble escrow guidelines
Petition title research
Comply with the bank's requirements as noted in the escrow agreement
Intake payments from the buyer
Prorate tax, interest, insurance and other fees according to instructions
Record deeds and other paperwork as instructed
Request title insurance policy
Close escrow when all instructions of seller and buyer have been met
Disburse payments and finalize instructions

The Escrow Holder Won't:

Give advice - the escrow holder must stay at a fair, third-party status
Give insight about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Write escrow instructions Request title inquiry Comply with the bank's guidelines as specified in the escrow agreement Intake 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 instructions of seller and buyer have been finished Disburse funds and finish instructions		Advise you - the escrow agent has to remain 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. 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 quick run-down of the escrow process. Your particular plan may be unique based on your bank and your escrow holder.

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