Whether it's your first property or your next house, I'll educate you through the process. E-mail me at mark.hoffer@verizon.net to get some free information.

First-Time Home Buying: How To Close on a Home

 Hoffer Realty Associates can walk you through closing - (814) 371-2100
First, a little about "escrow". To close the sale of a house, a neutral, third party (the escrow holder) is employed to assure the process will close appropriately and on time. A property is said to be in escrow when in the closing process, payment is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the exchange of money takes place. PayPal is a good example of an escrow company.

The escrow company makes sure that all terms and conditions of the seller's and buyer's negotiated agreement are completed prior to the sale being completed. This includes receiving monies and documents, completing required forms, and getting the release documents for any loans or liens that have been paid off with the transaction, assuring you have a free title to your house before the agreed upon price is fully paid.

These are the legal documents that escrow agents usually look for:

  • 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 completion 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 home and the title insurance gets issued as stated in the escrow instructions.

When closing is completed, you'll pay the fees to the escrow company. As your real estate professional, I'll let you know what is an acceptable way of paying.

The Escrow Holder Will:

  • Write escrow guidelines
  • Request title inquiry
  • Comply with the bank's standards as noted in the escrow agreement
  • Receive payments from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer have been finished
  • Disburse monies and finish instructions

The Escrow Holder Will Not:

  • Advise you - the escrow agent must maintain a neutral, third-party status
  • Give insight about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Petition title research
  • Comply with the bank's standards as noted in the escrow agreement
  • Intake payments from the buyer
  • Prorate tax, interest, insurance and other fees 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 payments and finalize instructions
  • Advise you - the escrow agent has to remain an impartial, third-party status
  • Give insight about the outcome of your taxes

Mortgage Escrow Account

Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. 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 better informed home buyer and future homeowner.