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Closing the Sale
Escrow
To finalize the sale of the home a neutral, third party (the escrow
holder, a.k.a. escrow agent) is engaged to assure the transaction
will close properly and on time. The escrow holder insures that all
terms and conditions of the seller's and buyer's agreement are met
prior to the sale being finalized, including receiving funds and
documents, completing required forms, and obtaining the release
documents for any loans or liens that have been paid off with the
transaction, assuring you clear title to your property before the
purchase price is fully paid.
The documentation the
escrow holder may be collecting includes:
- Loan documents
- 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
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Upon completion of all instructions
of the escrow, closing can take place. All outstanding payments and
fees are collected and paid at this time (covering expenses such as
title insurance, inspections, real estate commissions). Title to the
property is then transferred to the seller and appropriate title
insurance is issued as outlined in the escrow instructions.
At the close of escrow, payment of funds shall be made in an
acceptable form to the escrow. As your real estate agent, I'll
inform you of the acceptable form.
The
Escrow Holder Will:
Prepare escrow instructions
Request title search
Comply with lender's requirements as specified in the escrow
agreement
Receive funds from the buyer
Prorate insurance, tax, interest and other payments 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 met
Disburse funds and finalize instructions
The Escrow Holder Won't:
Give advice - the escrow holder must maintain neutral, third-party
status
Offer opinions about tax implications
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Mortgage Escrow Account
A Mortgage Escrow Account is established to pay on-going expenses
while there is a loan on the house. These expenses include property
taxes, home insurance, mortgage insurance, and other escrow items.
Generally, the Escrow Account is partially funded at closing and the
home buyer makes on-going contributions through their monthly
mortgage payment.
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