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What is Escrow?

 Multi Zone Realty, Inc. can walk you through closing - (818)784-7002
Escrow: To complete the sale of a property, a neutral, third party (the escrow holder) is brought into the picture to assure the process will close perfectly and on time. A property is said to be in escrow when in the closing process, payment is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. An everyday way to think of what an escrow company does is to compare it to PayPal for online purchases.

The escrow agent makes sure that the terms and conditions of the agreement between the seller and buyer are met prior to the sale being completed.

Escrow companies want to obtain the following legal documents:

  • 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 house happens when all of the procedures of the escrow are finished. All payments owed and fees are collected and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). The home's title gets handed over to you and title insurance is issued per the policies of your individual escrow process.

The escrow agent gets a payment when the closing is complete. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Petition title inquiry
  • Meet lender's standards as noted in the escrow agreement
  • Receive payments from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • 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 monies and finalize instructions

The Escrow Holder Won't:

  • Advise you - the escrow company stays a neutral, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow instructions
  • Request title search
  • Comply with the bank's standards as specified in the escrow agreement
  • Intake payments from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been finished
  • Disburse funds and finalize instructions
  • Give advice - the escrow holder has to remain an impartial, third-party status
  • Offer opinions about tax implications

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.

Now you know more about how to close on your future home. And, you can be a more confident home buyer and future homeowner.

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