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Buying Your Next Property: Closing

 Hoffer Realty Associates can walk you through closing - (814) 371-2100
First, a little about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is brought on to assure your house closes on time and the money exchanging part of closing goes smoothly. Escrow holders hold money for "safe-keeping" in a deal between a buyer and seller. For example, in a Web auction, PayPal is the reliable third party that holds the buyer's money, and then disburses the payment to the seller.

Clearing the final hurdles like obtaining funds, signing forms, obtaining the documents for loans and liens, and making sure you get a clear title to the home prior to your purchase gets finalized are all parts of closing in which an escrow agent is useful.

These are the legal forms that escrow holders usually compile:

  • Terms of sale and any seller-assisted financing
  • 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

Upon finishing of all instructions of the escrow, closing can take place. All payments owed and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then secure the title to the property and the title insurance gets issued as outlined in the escrow instructions.

The escrow agent receives a payment at the completion of closing. I'll keep you updated on the next steps.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Perform a title research
  • Comply with lender's standards as noted in the escrow agreement
  • Receive payments from the buyer
  • Prorate interest, insurance, tax and other payments according to guidelines
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse payments and finish instructions

The Escrow Holder Will Not:

  • Advise you - the escrow holder must maintain a neutral, third-party status
  • Give insight about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Perform a title inquiry
  • Meet the bank's requirements 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 paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse monies and finish instructions
  • Give advice - the escrow company must maintain a neutral, 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. Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.

Now you know more about how to close on your future home. And, you can be a more confident home buyer and future homeowner.