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

 Partnership Properties can walk you through closing - (662) 843-8850
Let's talk about "escrow". When you're closing on your new home, an escrow holder is used to assure the process will close correctly and in a timely manner. Escrow agents hold money for "safe-keeping" in transactions between a buyer and seller. PayPal is a good way to picture an escrow company.

The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are met prior to the sale being finished. This includes getting funds and records, completing required forms, and obtaining the release documents for any loans or liens that have been paid off with the transaction, assuring you have a clean title to your place before the asking price is fully paid.

Escrow holders want to acquire the following documents:

  • 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 portions of the escrow, closing can take place. All expenses like title insurance, inspections and real estate commissions are paid. The house's title gets transferred to you and title insurance begins per the policies of your individual escrow process.

At the close of escrow, fees are paid in an acceptable form to the escrow. As your agent, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Request title search
  • Meet lender's guidelines as outlined in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse payments and finalize instructions

The Escrow Holder Will Not:

  • Offer advice - the escrow holder has to remain an impartial, third-party status
  • Dispense opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Perform a title search
  • Comply with the bank's requirements as written in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other paperwork as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse payments and finish instructions
  • Advise you - the escrow holder stays at an impartial, third-party status
  • Dispense opinions 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. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

This is a simple outline of the escrow process. Your individual process might vary based on your bank and your escrow holder.

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