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Escrow 101

 Multi Zone Realty, Inc. can walk you through closing - (818)784-7002
Escrow: An escrow holder is brought on to assure your place 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 think of how you might use PayPal for online purchases.

Clearing the final hurdles like taking in funds, completing forms, obtaining the documents for loans and liens, and assuring you get a clean title to the property in preparation of your purchase gets finalized are all parts of closing in which an escrow company is useful.

The documents the escrow holder may collect include:

  • 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
  • Fire and other insurance policies
  • Title insurance policies

Closing on the property happens when the steps of the escrow are complete. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. The property's title gets transferred to you and title insurance begins per the steps of your particular escrow agreement.

The escrow agent receives a payment when the closing is complete. As your REALTOR, I'll let you know what is an acceptable form of payment.

The Escrow Holder Will:

  • Write escrow instructions
  • Petition title inquiry
  • Meet the bank's requirements as written in the escrow agreement
  • Intake payments from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other legal documents as instructed
  • Request title insurance policy
  • Close escrow when all terms of agreement of seller and buyer are met
  • Disburse payments and finalize instructions

The Escrow Holder Won't:

  • Give advice - the escrow holder has to remain an impartial, third-party status
  • Give insight about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Petition title research
  • Meet lender's requirements as written in the escrow agreement
  • Receive 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 have been finished
  • Disburse funds and finish instructions
  • Advise you - the escrow company must stay at a fair, third-party status
  • Dispense opinions about the outcome of your taxes

Mortgage Escrow Account

A Mortgage Escrow Account is used to pay on-going expenses while there is a loan on the house. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

Once you have the ABCs of the escrow process down, you can be a informed buyer.

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