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

 Hoffer Realty Associates can walk you through closing - 8143712100
First, a little about "escrow". To close the sale of a house, a neutral, third party (the escrow agent) is engaged to assure the transaction will close appropriately and on time. When money is held by a third party in a transaction between a buyer and a seller, it's in escrow. For example, in a Web purchase, PayPal is the neutral third party that holds the buyer's payment, and then hands over the funds to the seller.

Settling the last details like taking in funds, finishing forms, getting the documents for loans and liens, and making sure you get a spotless title to the house before your purchase gets finalized are all parts of closing in which an escrow holder is useful.

Escrow holders want to obtain the following forms:

  • 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

Closing on the home takes place when all of the procedures of the escrow are finished. All payments owed and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the house is then transferred to you as new owner and appropriate title insurance is issued as outlined in the escrow instructions.

The escrow company receives a payment at the completion of closing. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Write escrow guidelines
  • Petition title research
  • Meet lender's standards as written 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 are met
  • Disburse monies and finish instructions

The Escrow Holder Will Not:

  • Offer advice - the escrow agent has to remain an impartial, third-party status
  • Offer opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow guidelines
  • Request title research
  • Meet the bank's guidelines as outlined 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
  • 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 agent must maintain a neutral, 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 more confident home buyer and future homeowner.


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