First-Time Home Buying: How To Close on a House

Escrow
To finish the sale of a house, a neutral, third party (the escrow holder) is brought into the picture to assure the process will close correctly and on time. A place is said to be in escrow when in the closing transaction, payment is held by a third party on behalf of two parties when the transaction is taking place. For example, in an online transaction, PayPal is the neutral third party that obtains the buyer's money, and then sends the payment to the seller.

Clearing the final hurdles like obtaining funds, finishing forms, obtaining the documents for loans and liens, and assuring you a spotless title to the home in preparation of your purchase gets finalized are all part of the job of the escrow company.

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These are the legal forms that escrow companies usually look to collect: Requests for payment for various services to be paid out of escrow funds Loan documents Tax statements Fire and other insurance policies Title insurance policies Terms of sale and any seller-assisted financing

You're ready to close when every step is finished in escrow process. At this time, all payments and fees for inspections, title insurance and real estate commissions are collected. You'll then obtain the title to the property and the title insurance gets dispersed as outlined in the escrow instructions.

At the close of escrow, in an acceptable form to the escrow. I'll keep you updated on the through the procedure.

The Escrow Holder Will:		The Escrow Holder Won't:
Assemble escrow guidelines Perform a title inquiry Meet the bank's requirements as noted in the escrow agreement Receive funds from the buyer Prorate interest, insurance, tax and other payments according to guidelines Record deeds and other documents as instructed Request title insurance policy Close escrow when all terms of agreement of seller and buyer are complete Disburse funds and finalize instructions		Offer advice - the escrow company stays at an impartial, third-party status Give insight about future tax estimations

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 how to close on your future home. And, you can be a better informed home buyer and future homeowner.