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Escrow 101

 John-Mark Mitchell's Realty Group can walk you through closing - (336) 722-9911
Escrow: An escrow holder is used to assure your home closes on time and the closing process goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web auction, PayPal is the secure third party that obtains the buyer's funds, and then sends the funds to the seller.

The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are performed in preparation of the sale being finished.

The pieces of paperwork the escrow company may obtain include:

  • 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

Upon finishing of all portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. You'll then obtain the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.

At the close of escrow, payments of funds are made in an acceptable form to the escrow. I'll keep you up-to-date on the procedure.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Perform a title search
  • Comply with the bank's guidelines as noted in the escrow agreement
  • Intake payments from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other documents as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse funds and finalize instructions

The Escrow Holder Won't:

  • Offer advice - the escrow company has to remain an impartial, third-party status
  • Offer opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Perform a title search
  • Comply with the bank's guidelines as noted in the escrow agreement
  • Intake payments from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all terms of agreement of seller and buyer have been met
  • Disburse funds and finalize instructions
  • Advise you - the escrow holder must stay at a fair, third-party status
  • Give insight about tax implications

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 better buyer.