The process of buying a house for the first time can be intimidating. I can help. E-mail me at karl@multizonerealty.com to get some free information.

First-Time Home Buying: Closing

 Multi Zone Realty, Inc. can walk you through closing - (818)784-7002
First, a little about "escrow". When you're closing on your new home, an escrow holder is used to ensure the transaction will close without problems and in a timely manner. When payment is held by a third party in a transaction between a buyer and a seller, it's in escrow. 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 reached prior to the sale being finalized. This includes securing payments and paperwork, finishing required forms, and seeking out the release documents for any loans or liens that were paid with the transaction, assuring you have a free title to your house before the asking price is fully paid.

These are the legal forms that escrow agents usually compile:

  • 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
  • Loan documents
  • Tax statements

Closing on the property happens when the steps of the escrow are done. All expenses like title insurance, inspections and real estate commissions are paid. You'll then get the title to the home and the title insurance gets issued as stated in the escrow instructions.

At the close of escrow, fees are paid in an acceptable form to the escrow. I'll keep you updated on what comes next.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Petition title search
  • Comply with lender's requirements as written in the escrow agreement
  • Accept funds 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 have been finished
  • Disburse monies and finalize instructions

The Escrow Holder Won't:

  • Offer advice - the escrow agent must maintain a neutral, third-party status
  • Give insight about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow guidelines
  • Petition title search
  • Meet the bank's guidelines as noted in the escrow agreement
  • Accept payments from the buyer
  • Prorate tax, interest, insurance and other fees according to instructions
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse monies and finalize instructions
  • Advise you - the escrow holder must maintain a neutral, third-party status
  • Dispense 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. Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

Now you know more about being in escrow. And, you can be a better informed home buyer and future homeowner.

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