Whether it's your first property or your next house, I'll help you through the process. E-mail me at Johnmark@GoMitch.com to get some free information.

Buying Your Next House: Closing

 John-Mark Mitchell's Realty Group can walk you through closing - (336) 722-9911
Let's talk about "escrow". When you're closing on your new property, an escrow company is used to insure the transaction will close properly and in a specific time frame. Escrow companies hold money for "safe-keeping" in a deal between a buyer and seller. For example, in an Internet transaction, PayPal is the secure third party that holds the buyer's payment, and then hands over the money to the seller.

The escrow company makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are reached prior to the sale being completed. This includes receiving monies and paperwork, filling out required forms, and seeking out the release documents for any loans or liens that were cleared with the transaction, assuring you have a free title to your property before the negotiated price is fully paid.

Escrow holders want to obtain the following legal 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
  • Loan documents

Closing on the property happens when all of the procedures of the escrow are complete. All debts and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then receive the title to the house and the title insurance gets issued as agreed upon 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 professional, I'll let you know what is an acceptable way of paying.

The Escrow Holder Will:

  • Write escrow guidelines
  • Petition title research
  • Meet the bank's requirements as written in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse payments and finalize instructions

The Escrow Holder Will Not:

  • Offer advice - the escrow company stays a neutral, third-party status
  • Give insight about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Petition title inquiry
  • Comply with lender's standards as noted in the escrow agreement
  • Receive funds from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse monies and finalize instructions
  • Advise you - the escrow holder has to remain an impartial, third-party status
  • Dispense opinions about future tax estimations

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Once you have the rules of the escrow process down, you can be a informed buyer.