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

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What To Expect When You're Closing in Dublin

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First, a little about "escrow". An escrow holder is brought on to assure your property closes on time and the money exchanging part of closing goes smoothly. Escrow holders hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a simple way to think of an escrow company.

The escrow holder makes sure that the terms and conditions of the agreement between the seller and buyer are performed prior to the sale being finished.

The records the escrow holder may collect include:

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
Tax statements

You're ready to close when every step is done in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. The home's title is given to you and title insurance begins per the steps of your particular escrow process.

At the close of escrow, 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 instructions
Request title search
Comply with the bank's requirements as written in the escrow agreement
Receive payments 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 are complete
Disburse funds and finish instructions

The Escrow Holder Won't:

Advise you - the escrow company must maintain a neutral, 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 research Meet the bank's requirements as outlined in the escrow agreement Accept 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 terms of agreement of seller and buyer have been finished Disburse funds and finish instructions		Offer advice - the escrow holder has to remain an impartial, third-party status Dispense opinions about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is started to pay rolling expenses while there is a loan on the house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.

This is a quick run-down of the escrow process. Your individual methods will be unique based on your lender and your escrow holder.

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