Whether it's your first home or your next property, I'll walk you through the process. E-mail me at kaki@kakilybbert.com to get some free information.

First-Time Home Buying: Closing

 Century 21 Judge Fite Company can walk you through closing - 940-483-1090
Let's talk about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is used to assure your house closes on time and the process goes smoothly. Escrow companies hold money for "safe-keeping" in an exchange between a buyer and seller. An easy way to understand what an escrow company does is to compare it to PayPal for Internet purchases.

The escrow company insures that all terms and conditions of the seller's and buyer's contract are performed prior to the sale being finalized. This includes receiving monies and certificates, completing required forms, and obtaining the release documents for any loans or liens that were cleared with the transaction, assuring you have a clear title to your home before the negotiated price is fully paid.

Escrow companies look for the following pieces of paperwork:

  • 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
  • Terms of sale and any seller-assisted financing

Closing on the property happens when all of the procedures of the escrow are finished. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. Title to the house is then transferred to you as new homeowner and related title insurance is issued as noted in the escrow instructions.

When closing is in it's last step, you'll make a payment to the escrow company. As your real estate agent, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Perform a title inquiry
  • Comply with lender's standards as specified in the escrow agreement
  • Intake funds from the buyer
  • Prorate interest, insurance, tax and other payments according to instructions
  • 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 finish instructions

The Escrow Holder Will Not:

  • Give advice - the escrow holder stays at an impartial, third-party status
  • Give insight about the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Perform a title inquiry
  • Meet the bank's standards as written in the escrow agreement
  • Accept 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 funds and finish instructions
  • Give advice - the escrow holder stays at an impartial, third-party status
  • Give insight about the outcome of your taxes

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. 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 being in escrow. And, you can be a better informed home buyer and future homeowner.