What to Expect When You're in Escrow

Whether it's your first house or your next property, I'll advise you through the process. E-mail me at shannon@southerntraderealty.com .

Buying Your Next Home: Closing

Southern Trade Realty, Inc. can walk you through closing - (804) 694-3113

First, a little about "escrow". To finalize the sale of a home, a neutral, third party (the escrow agent) is employed to assure the process will close perfectly and on time. A house is said to be in escrow when in the closing process, money is secured by a third party on behalf of a buyer and a seller when the transaction is taking place. For example, in a Web auction, PayPal is the secure third party that holds the buyer's funds, and then hands over the funds to the seller.

Settling the last details like taking in funds, completing forms, obtaining the documents for loans and liens, and making sure you get a clean title to the home prior to your purchase gets finalized are all parts of closing in which an escrow holder is useful.

The certificates the escrow holder may collect include:

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

Upon completion of all instructions of the escrow, closing can take place. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. You'll then receive the title to the house and the title insurance gets dispersed as stated in the escrow instructions.

At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. I'll keep you up-to-date on what comes next.

The Escrow Holder Will:

Prepare escrow guidelines
Perform a title inquiry
Comply with the bank's requirements as noted in the escrow agreement
Accept payments from the buyer
Prorate tax, interest, insurance and other fees according to guidelines
Record deeds and other legal documents as instructed
Request 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 agent has to remain an impartial, third-party status
Offer opinions about the outcome of your taxes

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow instructions Petition title research Meet lender's standards as outlined in the escrow agreement Receive funds from the buyer Prorate tax, interest, insurance and other fees 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 have been met Disburse funds and finish instructions		Tell you what's best - the escrow agent has to remain an impartial, third-party status Give insight about tax implications

Mortgage Escrow Account

A Mortgage Escrow Account is established 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 better informed home buyer and future homeowner.

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