How Escrow Works
What To Expect When You’re Closing | Carthage MO
Let’s talk about escrow. To finish the sale of a property, a neutral, third party (the escrow company) is engaged to assure the process will close correctly and on time. Escrow agents hold money for “safe-keeping” in an exchange between a buyer and seller. PayPal is a simple way to think of an escrow company.
The escrow agent insures that all terms and conditions of the seller’s and buyer’s contract are reached prior to the sale being finalized. This includes getting payments and records, finishing required forms, and seeking out the release documents for any loans or liens that have been cleared with the transaction, assuring you have a clean title to your place before the final price is fully paid.
These are the records that escrow companies usually look for:
- 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
- Tax statements
You’re ready to close when every step is complete in escrow process. All expenses like title insurance, inspections and real estate commissions are paid. Title to the property is then given to you as new homeowner and appropriate title insurance is issued as outlined in the escrow policy.
At the close of escrow, payments of funds are made in an acceptable form to the escrow. As your real estate professional, I’ll inform you of the acceptable way of paying.
The Escrow Holder Will
- Write escrow instructions
- Petition title search
- Comply with the bank’s standards as outlined in the escrow agreement
- Intake payments from the buyer
- Prorate tax, interest, insurance and other fees according to guidelines
- Record deeds and other legal documents as instructed
- Request title insurance policy
- Close escrow when all instructions of seller and buyer are met
- Disburse funds and finish instructions
The Escrow Holder Won't
- Tell you what’s best – the escrow agent has to remain an impartial, third-party status
- Give insight about tax implications
Questions? We’d love to help.