How Escrow Works
To finalize the sale of the home a neutral, third party (the escrow holder, a.k.a.
escrow agent) is engaged to assure the transaction will close properly and on time. The
escrow holder insures that all terms and conditions of the seller's and buyer's agreement
are met prior to the sale being finalized, including receiving funds and documents,
completing required forms, and obtaining the release documents for any loans or liens that
have been paid off with the transaction, assuring you clear title to your property before
the purchase price is fully paid.
The documentation the escrow holder may
be collecting includes:
- 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 outstanding payments and fees are collected and
paid at this time (covering expenses such as title insurance, inspections, real estate
commissions). Title to the property is then transferred to the seller and appropriate
title insurance is issued as outlined in the escrow instructions.
At the close of escrow, payment of
funds shall be made in an acceptable for to the escrow. As your real estate agent, I'll
inform you of the acceptable form.
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- Prepare escrow instructions
- Request title search
- Comply with lender's requirements 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 have
been met
- Disburse funds and finalize instructions
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- Give advice - the escrow holder must maintain neutral,
third-party status
- Offer opinions about tax implications
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Mortgage Escrow
Account
A Mortgage Escrow Account is
established to pay on-going expenses while there is a loan on the house. These expenses
include property taxes, home insurance, mortgage insurance, and other escrow items.
Generally, the Escrow Account is partially funded at closing and the home buyer makes
on-going contributions through their monthly mortgage payment.
Redmans LLC
1700 SW 12th Avenue Suite C Boca Raton, FL 33486
Phone: 561.347.2177 Toll Free Phone: 1.877.511.6678 Fax:
561.347.5599 |
