Don't let inexperience with the real estate industry keep you from becoming a homeowner. I can help you understand the process. E-mail me at mark.hoffer@verizon.net .

What is Escrow?

 Hoffer Realty Associates can walk you through closing - 8143712100
First, a little about "escrow". When you're closing on your new place, an escrow agent is used to guarantee the process will close appropriately and in a specific time frame. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. An easy way to understand the concept of what an escrow company does is to compare it to PayPal for Internet purchases.

The escrow holder insures that all terms and conditions of the seller's and buyer's contract are reached prior to the sale being finished. This includes securing payments and paperwork, signing required forms, and getting the release documents for any loans or liens that are to be paid off with the transaction, assuring you have a free title to your home before the negotiated price is fully paid.

Escrow holders compile the following forms:

  • 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
  • Loan documents
  • Tax statements

You're ready to close when all steps are done in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. You'll then receive the title to the house and the title insurance gets issued as agreed upon in the escrow instructions.

When closing is finished, you'll make a payment to the escrow agent. As your real estate professional, I'll inform you of the acceptable way of paying.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Petition title research
  • Meet the bank's standards as written 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 are complete
  • Disburse funds and finalize instructions

The Escrow Holder Won't:

  • Offer advice - the escrow holder must maintain a neutral, third-party status
  • Dispense opinions about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow guidelines
  • Perform a title inquiry
  • Comply with lender's guidelines as specified in the escrow agreement
  • Receive funds from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • Record deeds and other documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse monies and finalize instructions
  • Tell you what's best - the escrow holder must maintain a neutral, third-party status
  • Give insight about future tax estimations

Mortgage Escrow Account

A Mortgage Escrow Account is established to make payments for recurring expenses while there is a loan on the 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.

This is a quick run-down of the escrow process. Your particular methods may be slightly different depending on your lender and your escrow company.


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