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Steps to Closing on a House

 Charles Burt Homefolks can walk you through closing - 417-358-6088
First, a little about "escrow". An escrow company is used to assure your home closes on time and the process goes smoothly. When funds are held by a third party in a transaction between a buyer and a seller, it's in escrow. PayPal is a good example of an escrow company.

The escrow company makes sure that the terms and conditions of the agreement between the two parties are met prior to the sale being completed.

The pieces of paperwork the escrow holder may secure include:

  • Loan documents
  • 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

You're ready to close when all steps are finished in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. The property's title gets handed over to you and title insurance is issued per the steps of your particular escrow agreement.

The escrow company gets a payment at the completion of closing. As your agent, I'll let you know what is an acceptable form of payment.

The Escrow Holder Will:

  • Prepare escrow instructions
  • Request title search
  • Comply with lender's guidelines as written in the escrow agreement
  • Intake 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 have been 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 the outcome of your taxes
The Escrow Holder Will:
The Escrow Holder Won't:
  • Assemble escrow instructions
  • Request title search
  • Meet lender's requirements as noted in the escrow agreement
  • Accept funds from the buyer
  • Prorate insurance, tax, interest and other payments according to guidelines
  • Record deeds and other legal documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer are met
  • Disburse payments and finish instructions
  • Give advice - the escrow agent must maintain 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. 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.

This is a quick run-down of the escrow process. Your particular methods might be different depending on your bank and your escrow agent.

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