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

Buying real estate for the first time can be intimidating. I can help. E-mail me at robert@providentrealtygroup.com to get some free information.

What is Escrow?

Provident Realty Group can walk you through closing - 9259999531

First, a little about "escrow". When you're closing on your new home, an escrow agent is used to make certain the transaction will close appropriately and in a specific time frame. A place is said to be in escrow when in the closing transaction, payment 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. PayPal is a good way to picture an escrow company.

Tying up any loose ends like receiving funds, completing forms, obtaining the documents for loans and liens, and making sure you get a spotless title to the house in preparation of your purchase gets finalized are all parts of closing in which an escrow agent is useful.

Escrow companies want to acquire the following legal documents:

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

Closing on the house happens when all of the procedures of the escrow are finished. All payments owed and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then obtain the title to the property and the title insurance gets issued as outlined in the escrow instructions.

The escrow agent receives a payment at the completion of closing. As your real estate professional, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:

Assemble escrow instructions
Request title research
Comply with lender's standards as noted 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 terms of agreement of seller and buyer are complete
Disburse payments and finalize instructions

The Escrow Holder Will Not:

Offer advice - the escrow holder must stay at a fair, third-party status
Give insight about future tax estimations

The Escrow Holder Will:		The Escrow Holder Won't:
Prepare escrow guidelines Perform a title inquiry Comply with the bank's requirements as written in the escrow agreement Intake funds from the buyer Prorate tax, interest, insurance and other fees according to guidelines Record deeds and other documents as instructed Obtain title insurance policy Close escrow when all instructions of seller and buyer are met Disburse payments and finish instructions		Offer advice - the escrow holder stays at an impartial, third-party status Give insight about future tax estimations

Mortgage Escrow Account

A Mortgage Escrow Account is started to pay recurring 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 being in escrow. And, you can be a smarter home buyer and future homeowner.

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