Steps to Closing on a Home

Let's talk about "escrow". When you're closing on your new house, an escrow holder is used to make sure the transaction will close correctly and in a certain amount of time. A house is said to be in escrow when in the closing process, money is held by a third party on behalf of two parties (in this case, a buyer and a seller) when the transaction is taking place. For example, in an online transaction, PayPal is the neutral third party that holds the buyer's funds, and then disburses the money to the seller.

Tying up any loose ends like receiving funds, completing forms, obtaining the documents for loans and liens, and making sure you get a spotless title to the house prior to your purchase gets finalized are all part of the job of the escrow agent.

Upon completion of all portions of the escrow, closing can take place. At this time, all payments and fees for inspections, title insurance and real estate commissions are taken. You'll then obtain the title to the house and the title insurance gets issued as stated in the escrow instructions.

The escrow company receives a payment at the completion of closing. We'll keep you informed on what comes next.

Mortgage Escrow Account

Often, to pay recurring costs while there's a loan on the house, a Mortgage Escrow Account is created. 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 more confident home buyer and future homeowner.