Don't let real estate industry jargon scare you from becoming a homeowner. I can help you understand the process. E-mail me at Johnmark@GoMitch.com .

First-Time Home Buying: Closing

 John-Mark Mitchell's Realty Group can walk you through closing - (336) 722-9911
Let's talk about "escrow". An escrow agent is hired to assure your home closes on time and the closing process goes smoothly. A place is said to be in escrow when in the closing process, payment is secured by a third party on behalf of a buyer and a seller when the transaction is taking place. PayPal is a good example of an escrow company.

The escrow holder makes sure that the terms and conditions of the agreement between the two parties are performed in preparation of the sale being finalized.

Escrow companies collect the following legal documents:

  • Requests for payment for various services to be paid out of escrow funds
  • Loan documents
  • Tax statements
  • Fire and other insurance policies
  • Title insurance policies
  • Terms of sale and any seller-assisted financing

You're ready to close when every step is finished in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are taken. Title to the house is then transferred to you as new owner and appropriate title insurance is issued as noted in the escrow instructions.

At the close of escrow, fees are paid in an acceptable form to the escrow. As your real estate agent, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Petition title search
  • Comply with the bank's standards as outlined in the escrow agreement
  • Intake funds from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse funds and finish instructions

The Escrow Holder Won't:

  • Tell you what's best - the escrow holder stays at an impartial, third-party status
  • Dispense opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Perform a title research
  • Meet lender's guidelines as written in the escrow agreement
  • Accept payments 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 terms of agreement of seller and buyer are met
  • Disburse funds and finish instructions
  • Offer advice - the escrow holder must maintain a neutral, third-party status
  • Offer opinions 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.

Now you know more about being in escrow. And, you can be a smarter home buyer and future homeowner.