Don't let inexperience with the real estate industry scare you from becoming a homeowner. I can help you become knowledgeable about the process. E-mail me at m.malave@comcast.net .

Buying Your Next Property: Closing

 Mark Malave can walk you through closing - (773) 938-2585
First, a little about "escrow". To close the sale of a home, a neutral, third party (the escrow agent) is engaged to assure the transaction will close correctly and on time. When payment is 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 Internet purchases.

The escrow holder makes sure that the terms and conditions of the agreement between the sellers and the buyers are completed prior to the sale being finalized.

Escrow agents want to acquire the following records:

  • 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

Upon completion of all instructions of the escrow, closing can take place. All outstanding payments and fees are collected and paid off at this time (covering expenses such as title insurance, inspections, real estate commissions). You'll then get the title to the house and the title insurance gets issued as noted in the escrow instructions.

At the close of escrow, payment of funds shall be made in an acceptable form to the escrow. I'll keep you updated on the procedure.

The Escrow Holder Will:

  • Assemble escrow instructions
  • Petition title research
  • Comply with lender's requirements as written in the escrow agreement
  • Intake 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 terms of agreement of seller and buyer are met
  • Disburse monies and finish instructions

The Escrow Holder Will Not:

  • Advise you - the escrow holder must maintain a neutral, third-party status
  • Offer opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Petition title inquiry
  • Meet the bank's guidelines as written in the escrow agreement
  • Accept funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been finished
  • Disburse funds and finalize instructions
  • Offer advice - the escrow holder must maintain a neutral, third-party status
  • Give insight about the outcome of your taxes

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. Though most home buyers make payments via their monthly mortgage payment, Escrow Accounts are deposited into at closing as well.

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

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