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Steps to Closing on a Property

 Multi Zone Realty, Inc. can walk you through closing - (818)784-7002
Let's talk about "escrow". When you're closing on your new property, a neutral, third party (known as the escrow holder or the escrow agent) is used to guarantee the process will close properly and on time. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. A simple way to understand what an escrow company does is to think of the use of PayPal for online purchases.

The escrow agent makes sure that all terms and conditions of the seller's and buyer's contract are met prior to the sale being completed. This includes getting funds and paperwork, completing required forms, and getting the release documents for any loans or liens that are to be paid with the transaction, assuring you have a free title to your home before the final price is fully paid.

Escrow holders want to obtain 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

You're ready to close when all parts are finished in escrow process. All outstanding payments and fees are taken and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then secure the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.

The escrow holder gets a payment at the completion of closing. I'll keep you updated on what comes next.

The Escrow Holder Will:

  • Write escrow instructions
  • Perform a title research
  • Comply with lender's standards as specified in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other 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:

  • Advise you - the escrow agent stays at an impartial, third-party status
  • Dispense opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow guidelines
  • Request title search
  • Comply with lender's guidelines as specified in the escrow agreement
  • Accept payments from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are complete
  • Disburse payments and finalize instructions
  • Tell you what's best - the escrow company stays a neutral, third-party status
  • Give insight about future tax estimations

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.

Once you're comfortable with the escrow process, you can be a informed buyer.

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