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Steps to Closing on a Property

 Big Bear Real Estate can walk you through closing - 802-744-6844
Let's talk about "escrow". An escrow company is hired to assure your property closes on time and the transaction goes smoothly. A property is said to be in escrow when in the closing process, money is held by a third party on behalf of two parties when the transaction is taking place. An easy way to think of what an escrow company does is to think of the use of PayPal for Internet purchases.

Settling the last details like obtaining funds, finishing forms, getting the documents for loans and liens, and making sure you get a clean title to the home prior to your purchase gets finalized are all parts of closing in which an escrow agent is useful.

These are the 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 paid out. You'll then obtain the title to the house and the title insurance gets issued as noted in the escrow instructions.

When closing is finished, you'll make a payment to the escrow holder. You'll know when it's time to submit the form of payment.

The Escrow Holder Will:

  • Write escrow guidelines
  • Request title search
  • Comply with 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 documents as instructed
  • Obtain title insurance policy
  • Close escrow when all instructions of seller and buyer have been finished
  • Disburse monies and finalize instructions

The Escrow Holder Won't:

  • Advise you - the escrow agent 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
  • Perform a title inquiry
  • Comply with the bank's guidelines as noted in the escrow agreement
  • Accept funds from the buyer
  • Prorate insurance, tax, interest and other payments according to instructions
  • 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 monies and finish instructions
  • Tell you what's best - the escrow company stays at an impartial, 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. Usually, the home buyer makes a payment at closing and also makes regular deposits through their monthly mortgage payment to fund the Escrow Account.

Now you know more about how to close on your future home. And, you can be a more confident home buyer and future homeowner.

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