Purchasing a house for the first time can be intimidating. Let me help you. E-mail me at craig@serenogroup.com .

What is Escrow?

 Craig Jelinek - Sereno Group can walk you through closing - 408-335-1425
Escrow: When you're closing on your new house, an escrow holder is used to make certain the process will close appropriately and in a timely manner. A house is said to be in escrow when in the closing transaction, money is secured by a third party on behalf of two parties when the transaction is taking place. A simple way to understand the concept of what an escrow company does is to think of the use of PayPal for online purchases.

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

These are the legal documents that escrow holders 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 each step of the complete in escrow process. At this time, all payments and dues for inspections, title insurance and real estate commissions are collected. Title to the home is then given to you as new owner and related title insurance is issued as noted in the escrow instructions.

The escrow holder receives a payment when the closing is complete. I'll keep you updated on what comes next.

The Escrow Holder Will:

  • Assemble escrow guidelines
  • Request title inquiry
  • Meet the bank's standards as written in the escrow agreement
  • Receive payments 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 terms of agreement of seller and buyer are complete
  • Disburse funds and finalize instructions

The Escrow Holder Will Not:

  • Tell you what's best - the escrow company must maintain a neutral, third-party status
  • Dispense opinions about tax implications
The Escrow Holder Will:
The Escrow Holder Won't:
  • Write escrow guidelines
  • Perform a title inquiry
  • Comply with lender's standards as noted in the escrow agreement
  • Accept payments 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 terms of agreement of seller and buyer have been finished
  • Disburse payments and finish instructions
  • Offer advice - the escrow agent must maintain a neutral, third-party status
  • Give insight about tax implications

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.

Once you have the ABCs of the escrow process down, you can be a informed buyer.

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