What is Escrow?

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Escrow
An escrow company is hired to assure your property closes on time and the transaction goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a good way to picture an escrow company.

The escrow agent makes sure that the terms and conditions of the agreement between the sellers and the buyers are performed in preparation of the sale being finished.

Don't let inexperience with the real estate industry scare you from becoming a homeowner. We can help you work your way through the process. E-mail us at michael.boyd@boydfunding.com.

The pieces of paperwork the escrow company may obtain include:

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

At the close of escrow, fees are paid in an acceptable form to the escrow. As your real estate professionals, we will let you know what is an acceptable way of paying.

The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Request title inquiry
  • Comply with lender's guidelines as specified in the escrow agreement
  • Receive 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 instructions of seller and buyer have been finished
  • Disburse funds and finalize instructions
  • Advise you - the escrow agent must maintain a neutral, third-party status
  • Offer opinions 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.

Once you're comfortable with the escrow process, you can be a more assured buyer.