Whether it's your first home or your next place, We'll advise you through the process. Call us at 918-447-8000.
Escrow 101
First, a little about "escrow". A neutral, third party (known as the escrow holder or the escrow agent) is brought on to assure your house closes on time and the transaction goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. An easy way to understand the concept of what an escrow company does is to compare it to PayPal for online purchases.
The escrow company insures that all terms and conditions of the seller's and buyer's contract are reached prior to the sale being completed. This includes getting monies and documents, signing required forms, and getting the release documents for any loans or liens that are to be paid off with the transaction, assuring you have a free title to your place before the purchase price is fully paid.
Escrow companies collect the following forms:
- 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
- Loan documents
Closing on the home happens when the steps of the escrow are done. All outstanding payments and fees are taken and paid at this time (covering expenses such as title insurance, inspections, real estate commissions). Title to the property is then given to you as new owner and correct title insurance is issued as outlined in the escrow policy.
When closing is finished, you'll pay the fees to the escrow company. You'll know when it's time to submit the form of payment.
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The Escrow Holder Will: |
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The Escrow Holder Won't: |
- Write escrow instructions
- Request title search
- Comply with the bank's standards as written 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
- Obtain title insurance policy
- Close escrow when all instructions of seller and buyer are complete
- Disburse funds and finish instructions
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- Advise you - the escrow agent has to remain an impartial, third-party status
- Dispense opinions about future tax estimations
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Mortgage Escrow Account
Creating a Mortgage Escrow Account helps keep track of on-going expenses while there's a loan on your house. Escrow Accounts are contributed to monthly by the home buyer (who is now the homeowner), but there is also a lump sum that goes into the account at closing.
Once you're familiar with the escrow process, you can be a informed buyer.