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Buying Your Next House: Closing

 Mark Malave can walk you through closing - (773) 938-2585
Escrow: To close the sale of a house, a neutral, third party (the escrow company) is engaged to assure the transaction will close perfectly and on time. A place is said to be in escrow when in the closing process, payment is held by a third party on behalf of two parties when the exchange of money takes place. For example, in an online auction, PayPal is the neutral third party that obtains the buyer's payment, and then sends the payment to the seller.

The escrow holder is careful to assure that all terms and conditions of the seller's and buyer's negotiated agreement are met prior to the sale being completed. This includes getting funds and documents, filling out required forms, and seeking out the release documents for any loans or liens that were cleared with the transaction, assuring you have a clear title to your home before the purchase price is fully paid.

These are the legal documents that escrow agents usually look to collect:

  • 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

You're ready to close when all steps are finished in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the house is then given to you as new owner and correct title insurance is issued as noted in the escrow policy.

The escrow company gets a payment at the completion of closing. As your real estate professional, I'll inform you of the acceptable form of payment.

The Escrow Holder Will:

  • Prepare escrow guidelines
  • Request title research
  • Meet lender's guidelines 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 legal documents as instructed
  • Request title insurance policy
  • Close escrow when all instructions of seller and buyer have been finished
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Give advice - the escrow holder stays at an impartial, third-party status
  • Offer opinions about future tax estimations
The Escrow Holder Will:
The Escrow Holder Won't:
  • Prepare escrow instructions
  • Petition title research
  • Meet the bank's guidelines as specified in the escrow agreement
  • Intake funds from the buyer
  • Prorate tax, interest, insurance and other fees according to guidelines
  • Record deeds and other paperwork as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been finished
  • Disburse monies and finish instructions
  • Give advice - the escrow company has to remain an impartial, third-party status
  • Offer opinions about future tax estimations

Mortgage Escrow Account

A Mortgage Escrow Account is established to make payments for recurring fees while there is a loan on the house. 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 familiar with the escrow process, you can be a confident buyer.

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